Perth’s sleeping unit market has been jolted awake following a king-sized jump in sales that has owners bracing for some price gains.
Though speedy house sales have hogged the spotlight during Perth’s property renaissance, REIWA said unit sellers were celebrating a 58 per cent jump for the March 2021 quarter, compared to the number sold in the same period last year.
According to the institute, unit purchase growth outpaced house sales during the March quarter.
Sales were also 25 days quicker for units compared to the 2020 quarter, though they lagged behind house sale times by 17 days.
With unit sales bouncing back to levels not seen since 2013, Mark Hay Realty Group Principal Mark Hay said people could be confident soaring prices wouldn’t be far behind.
“Clearly prices are headed for a long overdue upward push,” he said.
“Fast sales will continue as the market contracts further and more expats return to our wonderful state.
“I am tipping in the long run more offshore purchasers will seek to immigrate here permanently, which will further constrain supply.
“Another contributing factor is the rising cost of building a house due to things like labour shortages, which will ensure units become a more attractive option.”
According to Mr Hay, another factor propelling strong unit sales is Perth’s low vacancy rate, which he said was forcing would-be renters to purchase property.
He said financial incentives dished out by the Federal and State Government had also persuaded buyers, as had a desire to escape rapidly rising suburban price points.
These conditions were said to be ticking boxes for investors, who were looking at Perth as a very attractive option.
“CoreLogic statistics show we are better priced than Australia’s other capitals, yet we are the most affordable,” Mr Hay said.
“We have the highest rental increases, the highest rate of investment return, the lowest unemployment rate and we are the highest-income earning state in the country.”
Weighing into the conversation, REIWA President Damian Collins said unit sales reaching an eight-year high was likely to be sustained throughout the remainder of 2021.
“With the rental moratorium over and near record-low vacancy rates, it is likely the strong demand for units will continue throughout the remainder of 2021,” he said.
March quarter data for 2021 showed units were almost $120,000 cheaper than a house purchase on average, with the smaller homes typically valued around $381,750, while houses were going for $499,000.
The house price tag represented a four per cent growth rise over the past 12 months, while units achieved a more modest 0.5 per cent uptick.
Additionally, unit listings were only down 16 per cent compared to 2020’s March quarter, while the house cohort had sustained a 41 per cent plummet.
“Apartments, townhouses and units also offer plenty of lifestyle appeal and convenience, as they are generally lower maintenance and positioned closer to the CBD and other amenities,” Mr Collins said.