Shift in residential confidence
Western Australian property professionals are becoming more optimistic around the prospects of a recovery in the state’s embattled residential market, despite a national survey showing WA respondents had the lowest expectations across the country for an improvement in capital growth over the next 12 months.
The ANZ/Property Council of Australia biannual survey showed overall confidence had improved slightly in the WA market, notwithstanding the fact that house prices declined by 9 per cent in 2019, according to analysis from CoreLogic.
A separate survey by the local arm of the Property Council revealed a major shift in optimism in Perth property prices.
Property Council WA executive director Sandra Brewer told Business News that 65 per cent of respondents to a poll of 972 people conducted in December expected property prices in general to rise in 2020.
Ms Brewer said just 50 per cent of respondents to a similar poll for 2019 expected any capital growth.
Respondents were less likely to back their own properties to rise in value, however, with 58 per cent believing the values of their own homes would increase this year.
“These results are encouraging news for the local property market and the WA economy more broadly,” Ms Brewer said.
“The turnaround in property price sentiment indicates Western Australians believe the worst of the downturn is behind us and now they can start to plan for the future with more certainty.”
The ANZ/Property Council survey showed local industry considered the federal government’s response to the state’s housing crisis as lacking, while the state government’s performance on housing supply, affordability, development around transport nodes and planning reform was rated highly.
Ms Brewer said the state government’s 75 per cent stamp duty rebate for off-the-plan apartment sales, announced in October last year, was another positive step.
“Our members will be watching closely for a surge in buying interest,” she said.
Recent analysis by Riskwise Property Research also showed buyer confidence was on the rise, with housing finance increasing by 15.1 per cent since February 2019.
Riskwise chief executive Doron Peleg said Perth was considered to be “very affordable”, while a small number of suburbs had delivered reasonable capital growth.
But with those suburbs exceptions to the overall market, Mr Peleg said houses in WA remained a risky proposition for investment.
“The risks associated with units is even higher as they are expected to deliver poor or negative capital growth due to the combination of oversupply, lending restrictions and low demand as they are generally not attractive to families or owner-occupiers," he said.
“Also, units in some suburbs are subject to voluntary lending restrictions by the major lenders, such as lower loan-to-value ratio (i.e. higher deposit).”