WA Perth Market 2022

Supply costs are going up at frightening rate too. Labour and materials.

Where it gets interesting is when interest rates get jacked up again (and again). The cost of building new housing will be going up at precisely the same time as demand is being reduced through higher borrowing and servicing costs.

The safety valve of new builds on the fringe will have to do some very heavy lifting.

 

I guess this is assuming demand will decrease due to IR rises. I dont this happening in Perth

Syd median $1,400,000
Melb median $1,000,000
Perth median $560,000

 

Perth housing crisis: WA facing shortage of 22,000 homes within four years

WA is facing a shortage of about 20,000 homes within four years, with fears this will keep local house prices rising.

The Real Estate Institute of WA said the State needs to build 19,500 homes a year to keep up with population growth, new demolitions and to address the existing shortage.

But official ABS figures show WA completed fewer than 14,000 new homes — which includes both houses and apartments — last year as the sector struggles with labour and supply shortages.

REIWA president Damian Collins told The West Australian this slow rate of construction put WA on track to build 56,000 homes over the next four years, not the 78,000 required.

“Houses are taking twice as long to build as they were only a few years ago,” Mr Collins said.

“The issue is less about the demand for new builds from homebuyers, it’s the ability to complete the housing with the current labour we have.”

Mr Collins said the State was already in a housing shortfall, with an extra 8000 homes needed to restore equilibrium and to end the rental crisis.

Official State Government population projections, contained in the recent Budget papers, anticipate an extra 150,000 people living in WA over the next four years.

If 2.5 people live in each home, the State will need 60,000 properties to accommodate the new West Australians.

A further 10,000 new homes will be needed to replace those set to be demolished over the next four years.

The combined demand means the State needed to build 4875 homes each quarter, yet in the last three months of 2021, only 3394 homes were completed.

Mr Collins called for more skilled labour, claiming the current rate of construction would lead to further pressure on rents and house prices.

“While the grants in 2020 have helped building starts, there simply isn’t enough skilled labour to finish properties in a timely and cost effective manner,” Mr Collins said. “Some of the material supply issues may ease off this year but we still can’t complete the number of homes we need.”

But he acknowledged it would be harder to attract migrant labour given there were building booms all over the world.

WA facing shortage of 22,000 homes within four years

 

There is an insane amount of construction and mining jobs to fill, and not enough housing to give shelter to extra people who will be enticed to fill the demand.

Demand will be greater than supply for a year or two I would think. Rates will be irrelevant here for a little bit, given the more modest sizing or mortgages and the fact that everyone with skin in the game is sitting on large offsets.

 

Interesting article @george costanza , do those shortage numbers account for migration as well, which is just opening up? I had a quick Google but wasn't able to find immigration numbers into/out of WA.

 

Not just construction and mining. Skilled, unskilled, retail, hospo, pharmacy, reception, office support are a few off the top of my head.

There are signs in windows, workplaces are using the network of existing staff, signs in businesses explaining delays due to being short staffed.

Great opportunity for young couples (for example) to come over and get some high paying, full time work for a year or two.

 

And rinse and repeat again for for this week. Sydney and Melbourne house prices are collapsing

 

Tumble, collapse - emotive words.

 

Yes. I look past the headline. Basically mel and syd dropping, brissy flat, adelaide is leading but perth to takeover.

 

I am following Melb inner suburbs, not as many buyers, market softening. At auctions the quoted range would once be blown out of the water. Today struggling to get asking price at lower range point.

Market sentiment has gone from FOMO to fear of interest rate rises. We will see more stock coming to market

 

Yup. I dont see large falls in melbourne across the board. Hasnt seen the massove covid upswing of other markets. Its a lot cheaper than sydney and is very immigrant dependant which is ramping up.

 

I’ve never seen such desperation for rentals before! Random message sent to my husband from an agency we’ve never had dealings with.

 

Interesting..... Brisbane is only a couple of months behind Sydney.

Adelaide is the quiet achiever....

Agree Perth will be out in front soon......within the next 6-12 months and for a while as it has not done the crazy increases yet.

 

The applicants I am getting most don't have a local or even Australian rental history.
Others would be fine but their rent (weekly amount) expectation is a little low.
Arriving from overseas and living on your brothers couch is not a reference imho one from you boss telling me you're a good worker doesn't work for me. Maybe I am too fussy

 

Don't worry about overseas migration as that may take some time... it is the migration back to Melbourne from Brisbane which will help. Brisbane as gone up so much and rents have increased where it is more expensive.

I reckon people will start moving back.....

 

Yes I’m getting applications from overseas students and agencies, and some interstate with no rental history. For the no rental history I ask them if I can call their previous employer for a character reference. A lot of my best tenants have had no rental history. I haven’t been game to go down the student path yet, it’s too tempting to take Fifo workers that are barely home and don’t cook.

 

I took a chance with two students with no rental history. Parents co signed the lease guaranteeing to cover rent if need be.
The students are from down south and are studying at Curtain school of Medicine. They are very good tenants for over two years now. I may not have accepted them without the parents guaranteeing any rent shortfall.

 

My best renter ever was a single bloke on a disability pension.

Worst ever was a famous well off Australian sport star.......

 

@Squirrell and @Whitecat
City of Belmont suburbs. Our offer is now accepted. Maybe we overpaid a bit but should be ok in a long run. thinking to buy one more low-entry but don’t like the competition atm

 

I recall you buying in NSW and Qld. well done for another one on your list.