REIWA President Damian Collins said the Institute was revising its 2021 forecast following the strong price growth experienced in the first three months of 2021.
“CoreLogic’s Perth home value index shows prices have grown five per cent in the first three months of 2021. In November 2020 REIWA forecast prices in WA would increase as much as 10 per cent in 2021, however based on what we have seen in the first quarter of 2021, we now anticipate growth of 15 per cent by the end of the year.
“There are a number of factors contributing to the strong price growth we have seen and expect to continue to see this year. WA is still the most affordable state in the country when comparing income to median house prices. The current Perth median house sale price is $495,000, which is down from the peak of $550,000 in 2014.
“We hit the bottom of the market around June last year following the COVID-19 lockdown and since then consumer confidence has returned. Buyers who were waiting for the bottom to hit are now eager to get into the market and take advantage of the record low interest rates.
“There is also a fundamental imbalance between supply and demand in the sales market right now, with more buyers looking for property than there are houses listed for sale. Buyers must act quickly and in competition with one another to secure a property, which is driving up house prices.
“When you factor all these components in, it is a perfect storm for higher-than-expected house price growth this year. We need to get more homes and apartments built. Until we see supply catch up with demand, we will see prices continue to rise,” Mr Collins said.