While 2021 has held significant challenges for many as the pandemic continues to impact on the health and wellbeing of people around the world, Western Australia has been somewhat sheltered from the broader economic implications of long-term lockdowns and restrictions.
After the new building stimulus measures boosted the housing market significantly in 2020, there were expectations that demand for new land and housing would soften in 2021 as incentives ceased.
However, given our state’s ongoing economic performance, low unemployment rate and general confidence in the market, demand continued to increase throughout the year.
We have also seen record-low rental vacancy rates influencing people to purchase, with accommodative interest rates sweetening the deal.
According to UDIA WA’s new land sales figures, there was an average of around 2200 new lots sold each quarter in 2021.
To put that into context, that figure is well above the five-year moving average of about 1600 lot sales per quarter.
In good news for buyers, Perth and WA have remained relatively stable in relation to price growth, meaning Perth is still one of the most affordable cities in the country while maintaining positive growth.
The average price of new land in the September quarter was $247,390, a five per cent increase compared to the previous quarter and a 12 per cent increase compared with the same quarter in 2020.
While sales were strong, significant pressure was put on builders throughout the year to deliver on new dwellings, with extended construction timeframes caused by the stimulus and current trade and material shortages combined to put extra pressure on the sector.
The anticipated return of overseas migration in early 2022 is likely to drive further momentum in the property market.
UDIA WA understands there is a backlog of around 28,000 permanent migration visas that have been granted, with WA as the likely destination.
Annual migration in previous years totalled 30,383 in 2012-13 and 29,043 in 2014-15, which was at the peak of the last economic cycle.
Combining the current backlog with the typical annual migration figures of previous boom years, we would anticipate annual net overseas migration to total 55,000.
These figures highlight the likelihood of continued demand for housing as we move into 2022 and beyond, and it is great to round out the year on such a positive note.