"We have a significant shortfall in supply versus demand"
WA's established homes market is facing significant pressure due to robust population growth, according to the Real Estate Institute of Western Australia.
Recent data from the Australian Bureau of Statistics reveals that over 73,000 individuals migrated to WA in the year leading up to June. Based on an average household size of 2.5 people, this influx translates to approximately 30,000 additional households during that period.
“However, we are building about 14,000 new homes per year so we have a significant shortfall in supply versus demand,” said REIWA CEO Cath Hart (pictured above). “Earlier this year the National Housing Finance and Investment Corporation stated WA faced a shortfall of 25,200 new properties from 2023 to 2027. At current building completion and population growth rates this is very likely to increase.”
The strong migration numbers are placing upward pressure on property prices and rental rates. Many migrants initially turn to the established homes market for either purchasing or renting a property upon their arrival in WA.
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The increased demand, both from migrants and locals, has driven up house prices by 8.2% in the past year, with houses typically selling within eight days of being listed, REIWA reported.
The rental market has also been significantly impacted, with median rent rising by 20% in the last 12 months. Although the vacancy rate for November remained stable at 0.7%, this is close to a record low and well below the 2.5-3.5% range that typically characterises a balanced market.
“What we need is a consistent pipeline of new housing,” Hart said. “There is definitely the demand for it, but a number of issues are slowing completions, from capacity in the building industry to infrastructure costs and supply, and even connection to the electricity system. In addition, while building approvals have risen slightly, they are still very low and this is a concern for the longer term.”
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