Today’s announcement from RBA Governor Philip Lowe that official interest rates will remain at record lows until at least 2024 provides further confidence in WA’s longer-term residential property market recovery and will encourage much needed investors back into the market according to the Urban Development Institute of Australia (UDIA WA).
“Attracting investment into WA’s residential market is important not only to longer term market growth, it is absolutely critical to addressing the rental crisis that WA is currently facing,” UDIA WA CEO Tanya Steinbeck said.
“The WA land and housing markets bounced back quickly in 2020 due to direct stimulus measures introduced by the state and federal governments,” Ms Steinbeck said.
“Land sales tripled almost overnight after the Building Bonus and Home Builder announcements and high levels of activity remained throughout the year,” Ms Steinbeck said.
“Building Approval figures released today by the Australian Bureau of Statistics (ABS) further reflect the recovery, with WA’s building approvals increasing 7.8% in the month of December 2020,” Ms Steinbeck said.
“While these figures are very positive for the residential market, we have also seen rental vacancy rates fall to as low as 0.8% in WA as people moving back to the state scramble to find accommodation at a time when investors have all but dried up due to the rental moratorium and a prolonged period of flat market conditions over the last few years,” Ms Steinbeck said.
“Interest rates are an important factor for new home buyers and homeowners alike,” Ms Steinbeck said. “Low rates offer significant mortgage relief for many.”
“Low rates also play an important role in attracting investors back into the market,” Ms Steinbeck said.
“Attracting more investment in the WA market is critical to tackling the looming rental crisis in WA,” Ms Steinbeck said.
“Our rental market is heavily reliant on private investors to provide a large portion of our rental stock and any incentives to encourage more investment in the WA housing market at this time are welcome,” Ms Steinbeck said.
“I believe that with the end to the rental moratorium in March and the confidence that rates are likely to remain low for at least the next three years we will see investors start to dip their toes back in,” Ms Steinbeck said.
“Of course, any further incentives that the government could provide to boost investor confidence would be very welcome to speed up this activity and ensure that we can get more rental stock to market quickly,” Ms Steinbeck said.
“Rental insecurity threatens many low to medium income households and the most vulnerable within our community so it is critical that we address the rental crisis head on as a priority.”
Contact:
Gemma Osiejak
Executive Manager Communications & Marketing
P: 0421 506 819
E: gosiejak@udiawa.com.au