EXPERTS in the market are remaining positive for the year to come, with the Real Estate Institute of Western Australia's 2023 outlook estimating Perth house prices will show moderate growth of two to five per cent in the coming year.
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REIWA chief executive officer Cath Hart said Perth's forecasted growth will be supported by ongoing low supply and strong demand.
Throughout 2022, sales remained strong in Perth with the average weekly sales up 2.87pc compared to the year before.
"We anticipate sales volumes to remain at about this level in 2023," Ms Hart said.
"As building completions increase over the next 12-18 months we anticipate that listings will start to increase, however they will remain below historic averages.
"The low supply and strong demand will maintain a relatively steady state for WA house prices over the coming 12 months."
The Perth median house price rose 2.86pc from $525,000 to $540,000 in 2022, despite eight interest rate rises throughout the year.
"Perth remains the most affordable capital city by median house price, and while prices have risen in the past two years, in many areas they are still below the previous peak in 2014/15," Ms Hart said.
According to Ms Hart, the Perth established home market is absorbing interest rate changes well, as it is supported by a strong economy, low unemployment and population growth.
"With rate rises continuing into the new year, we are starting to see buyers adjusting their expectations and budgets.
"As a result, we anticipate good sales activity to continue in the low-mid price brackets in 2023."
Regional centres are also expected to thrive in 2023, after a large increase in demand post-COVID-19.
Towns such as Busselton, which now has three FIFO companies flying out of its airport, are benefiting from the idea that you don't have to live where you work, as more people begin remote work.
Lifestyle is expected to remain a driving factor behind where people choose to live in 2023.
"We have some of the most affordable housing in the country, especially in our regional towns," Ms Hart said.
"They offer enviable lifestyle opportunities and are likely to attract strong demand from buyers as WA's population continues to grow."
It has been described as a bumper year in the world of farming, and property has been no exception.
2022 was marked with record breaking prices across regional WA, as farmers looked to expand and investors from interstate showed increased interest in the previously undervalued west coast.
Consistent rises in interest rates by the Reserve Bank of Australia didn't seem to dampen spirits, as properties were sold both off and on the market at a rapid rate.
Across the State, land was selling in under a week, with reports that some rentals were being snatched up within hours.
However, those wanting to build faced some difficulties, as a post COVID-19 bottleneck on building supplies resulted in skyrocketing prices and large delays.
The year wasn't quite as rosy for tenants in 2022, as rentals were extremely hard to come by in a tight market.
The vacancy rate dropped to 0.7pc as rental listings remained at a near-record low.
The median weekly rent was $500 in November, which was $60 higher than a week ago, according to REIWA data.
However, Ms Hart believes the tides are turning with rental properties, as more investors re-enter the market.
"After seeing investors leaving the market in the past two years, with more than 18,000 fewer rentals now since the peak in January 2021, we are starting to see increasing investor activity, particularly from Eastern States investors," she said.
"Rental listings will remain low in the medium term but are expected to improve over the next 12-18 months, as both building completions and investor activity increase."
Elders
The team at Elders Real Estate considered 2022 to be a very successful year and made a point to thank all valued buyers and sellers they worked with during 2022.
"Although the term 'record breaking' has become a cliche in real estate, plenty of records certainly were broken in 2022 and we are really proud of what our network achieved in 2022," said Elders Real Estate senior real estate executive Simon Cheetham.
In the past year, Elders Real Estate successfully sold more than 2000 properties across regional WA, a true testament to the strength of Elders' network.
"The effort put in by the real estate team across WA has been exceptional,'' Mr Cheetham said.
"The momentum is looking as if it will carry into 2023 with a large number of new listings and sales to settle.
"Hopefully the team and our clients are able to enjoy a well-earned break over Christmas and head into 2023 fully charged".
According to Mr Cheetham there were plenty of highlights for 2022, however a couple which stood out included sales on behalf of the Peacock family at Gairdner, by Simon Thomas from Elders Albany, and Barellan, which sold on behalf of the Cripps family at Northampton, by Courtney Keeffe, from Elders Geraldton.
New price benchmarks for the respective districts were set at the time.
A large number of farms sold by Elders Real Estate are under contract and due to settle early in 2023.
Elders Real Estate also held many auctions across the State during 2022, including live auctions in Narrogin, Wickepin, Boyup Brook, Manjimup, Wandering, Westonia, Popanyinning Jerdacuttup, Kojonup and Mumballup.
The vast majority of these properties sold on the auction day at prices which exceeded vendor expectations.
Some of these were overseen by licensed real estate agent and auctioneer Jeff Douglas, who said "the auction process is working well in the current market and prices still appear to be on the rise, whether being offered for sale by auction or other proven methods of sale".
In terms of where the rural property market is headed, Mr Cheetham was reluctant to make any bold predictions, but was confident strong land prices were here to stay with demand for properties, particularly broadacre farms, remaining strong.
"Given another excellent harvest is being experienced across much of the State, albeit a slow start for many, plenty of growers remain eager to expand and I would imagine those properties available once harvest is out of the way will attract plenty of attention."
Pastoral
Elders real estate pastoral sales specialist Greg Smith said the pastoral market had relatively few quality listings come to the market in 2022, albeit with buyer demand being sound.
"The largest recent sale that we are aware of was the Springvale aggregation of Springvale, Mable Downs, Texas Downs and Alice Downs in the East Kimberley,'' Mr Smith said.
"This aggregation of more than 604,000 hectares was marketed with an estimated 35,000 head of cattle.
"The final sale price was confidential."
In the Gascoyne, Dalgety Downs changed hands with settlement only taking place late last year.
There has been some activity in the Murchison, with Yoothapina, at Meekatharra, settling in 2022 despite the sale being negotiated in August 2021.
Other sales include Milly Milly/Beringarra, Bunawarra and Narndee/Boodanoo, which were driven more by carbon credit potential than livestock production.
Mr Smith said carbon credit values were starting to crystalise more as owners receive payments for Australian carbon credit units and we are starting to see banks and valuers more confidently attribute values to these and in a recent transaction even lend against them.
"There is a very complex set of rules and regulations around the carbon credit system and as we deal with various properties in various locations it is becoming clear that nothing can be taken for granted as every property may present its owns issues regarding qualifying for carbon credits, registering a carbon project and transferring a carbon project,'' he said.
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"We are in the final stages of negotiations on Lake Barlee, which is the first pastoral lease in WA with a registered carbon project to be taken to the open market.
"While we can't disclose any details of the sale, at this stage, I encourage any prospective sellers of a property with a carbon project to contact me to discuss marketing options, as it appears some of the sales that have taken place off-market and devoid of competition are now looking to be below what the market is willing to pay in a competitive environment."
Mr Smith said the Department of Lands and ministerial approval process had remained frustrating for buyers and sellers, with some approvals taking up to nine months, which he said was was unacceptable in a commercial transaction.
"It has made management very difficult for sellers and has made maintaining staff and recruiting staff very challenging with no predictable time frames for anyone to work within,'' Mr Smith said.
"It does appear that the restructuring that took place in the Department of Lands has been revisited and some form of operational efficiency is returning."
Nutrien Harcourts
Nutrien Harcourts real estate manager - west Darren Tapscott said the company had experienced another outstanding year, following on from 2021's record turnover with 2022 almost eclipsing that record.
"Demand across the State for all property types has remained exceptionally high, and this combined with a tightening of supply resulted in some very significant transactions setting new land value records in some districts,'' Mr Tapscott said.
"The spring selling season, which started relatively early, and in some areas continued into December, has been exceptionally strong, albeit on a tightening of listings across the Wheatbelt.
"In some districts there have been no significant rural property sales recorded, whilst other areas have experienced a run of property sales."
Mr Tapscott said while there was some ongoing corporate activity, local and district farmers were the most significant participants in the current selling season, with the strength of balance sheets and the strong positive outlook contributing to some very significant acquisitions by farming families.
Similarly, pastoral sales have been relatively infrequent but maintaining strong enquiry levels in the north, he said.
"The southern rangelands have been the revelation, with strong demand off the back of carbon farming and renewables resulting in sales at levels that were inconceivable three years ago,'' Mr Tapscott said.
"The main driver of demand is flowing from consecutive good seasons, with yet another well above average season being harvested.
"This has placed many farm operations in an extremely strong equity position resulting in high competition for any land that has come to market."
Mr Tapscott said while interest rates were on the rise, the cost of capital was still at relatively low levels historically, which was also a major contributor to the demand for farmland.
"The most significant increases in values have occurred in districts where there has been limited supply over the past couple of years,'' he said.
"The pent-up demand created by the lack of opportunity has resulted in significantly increased land values when those opportunities have been presented to market, with the Dowerin, Cunderdin and Northam areas being a case in point where Nutrien Harcourts has achieved outstanding results for its vendors."
