We’re about to enter a new decade, so it’s a great time to take a look at what might be in store for the Perth property market in 2020 and beyond.
Of course, Perth’s real estate market is influenced by both national and local factors, so it’s important to take a look at both. This Perth property report contains three predictions for the local market based on key factors.
The Australian property market bottomed out in the first half of this year, before starting to rebound in the second half. Three interest rate cuts during 2019 helped to stimulate buyer demand. Interest rates in Australia are currently at record lows, but some analysts are tipping further cuts in 2020. That’s great news for home buyers and homeowners, because lower interest rates make home loan repayments more affordable.
The federal government is also due to introduce the First Home Loan Deposit Scheme (FHLDS) to help first home buyers in January 2020. The FHLDS is intended to help up to 10,000 eligible first home buyers each year to enter the property market sooner. These buyers will be provided with a government guarantee to help them avoid the cost of lenders mortgage insurance (LMI).
Lenders typically require borrowers to have LMI if they have a deposit below 20%. The cost of LMI varies depending on the value of the home loan, but it can cost borrowers $10,000 or more.
Prediction 1: Both of these national factors (low interest rates and the introduction of the FHLDS) should help to make 2020 a good time to buy property in Perth, particularly for first home buyers.
Perth has been a buyer’s market for several years. Prices have dropped by 22% since the market last peaked in 2014, and Perth real estate is currently among the most affordable in Australia’s major capital cities. In fact, according to SQM Research, Perth property is now 10% undervalued with prices being comparable to what they were back in 2006.
Prediction 2: Perth’s affordable real estate prices will see it remain a buyers’ market for the foreseeable future.
Prediction 3: According to Domain, Perth property prices could increase by up to 2% in 2020 on the back of stronger demand in the buyers’ market that currently exists. However, this forecast increase is the lowest of any Australian capital city. The REIWA also expects home sales activity to increase in Perth in 2020.
Of course, no one has a crystal ball to be able to predict exactly what will happen in the future. However, all the indications are that now is a good time to buy real estate in Perth.
If you’re thinking about buying a Perth home, our expert team at Now Living Realty can help you. We have a diverse range of property listings across the Perth metropolitan area.
Contact us today to find out more. We’d love to hear from you!