A RECENT PropTrack report has delivered a promising view on the Western Australian property market, with WA being one of only two States to have seen both capital and regional market prices increase.
In the past month, regional WA house prices increased by 0.24 per cent, and they have grown by 30.9pc since March 2020, while Perth's house prices increased by 0.04pc.
What makes these statistics unusual is that the regional areas of WA are out performing the metropolitan areas, said PropTrack economist Paul Ryan.
"Fundamentally, the out-performance of regional areas is quite rare," Mr Ryan said.
"That's one of the key things in the post pandemic housing market that has been quite unusual.
"It hasn't been driven by investors, it's been almost entirely an owner-occupied dominated market until this year - when investors have kind of come back into the market.
"This doesn't seem to be a speculative thing.
"It seems to be driven by actual migration flows - people moving to these regions, which I think is a really positive development."
There are two main reasons that the value of regional property has increased proportionally more than metropolitain property.
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"Firstly the value placed on larger homes has increased a lot, relative to smaller homes," Mr Ryan said.
"If people aren't going to the office five days a week they need a bit more space.
"It's more about valuing home space and spending more time in their homes, valuing extra bedrooms for home offices and valuing bigger garden spaces.
"The premium for a four-bedroom house, over an apartment or over a smaller house is larger than we have seen since the start of the pandemic.
"The other factor for this steady increase in regional property prices is people moving for lifestyle reasons, by "reassessing the rat-race type scenario".
"Regional areas have both of those - they have bigger homes, they have places with bigger gardens and often people want bigger homes so they can have a home office because they are working from home," Mr Ryan said.
"And also, it's that push towards affordable locations now, with the huge housing price upswing that we saw over the past two years, prices are up close to 35pc since the start of the pandemic nationally."
Both WA and South Australia have managed to escape the rapid decrease in property prices experienced by the Eastern States, largely due to them both having favourable prices compared to the rest of the country.
"Partly, WA has its own housing price trend - so it doesn't follow what the Eastern States tend to do for housing prices," Mr Ryan said.
"The rise of more remote work means there are people who are able to take advantage of lifestyle locations, and particularly locations that have more affordable price points.
"I think Perth and regional WA are ticking those boxes."
When asked about his forecast for the rest of the year, Mr Ryan believed interest rates would be a dampener but comparatively WA would perform better than the rest of the country.
"Rates delved to their lowest rate on record and now that rates are going up quite sharply, it's having the reverse effect on prices," he said.
"I think the weight of higher interest rates is unfortunately going to lead to price falls across all markets - we've seen price growth drop in regional WA and in Perth already.
"With the RBA widely expected to increase interest rates by another 50 basis points this week - and again next month - nationally we forecast prices to fall by 7-10 pc.
"But for Perth, we are expecting pretty flat prices, so something between a fall of 2pc or an increase of 1pc.
"So while that doesn't sound good on its own, relative to what we are expecting conditions-wise elsewhere, that's quite positive.
"We are expecting maybe not sustained falls in Perth and regional WA, but closer to flat results over the next 12 months or so."
