Sunday Times Editorial by Penelope Thomas
Prospective homebuyers are in luck, with the most recent REIWA Curtin Buy-Rent Index revealing it is currently the best time to buy in Perth since 2013.
A tool used to assess the viability of buying versus renting based on past and current economic trends, the March 2018 REIWA Curtin Buy-Rent Index found median house prices would need to grow by more than 3.1% annually by the end of the next 10 years for the purchase of a house to be considered more financially viable than renting.
REIWA President Hayden Groves said this figure had decreased from 3.3% in the previous quarter, which suggested an improvement for prospective homebuyers weighing up the decision. “To put that is perspective, Perth’s annual house price growth rate has been 5.9% for the last 15 years,” he said.
Based on March 2018 quarter Index, house prices in Perth would only need to grow by more than 3.1% annually for buying to be considered more financially beneficial than renting. “This improvement in buying conditions can be attributed to the Perth median house price softening by 1.9% during the March quarter, while the median house rent price increased $5 to $360 per week.
“We also saw the annual 10-year average mortgage rate drop to 6.43%, which means homeowners are paying less on their mortgage repayments. “This is the most affordable buying environment we’ve seen in Perth for some time, so if you’ve been weighing up whether to buy, now is the time to take advantage of favourable market conditions,” Mr Groves said.
Curtin University School of Economics and Finance property researcher and senior lecturer J-Han Ho said the data indicated a continued improvement for the homebuyer in the near future. “Our analysis shows homebuyers gaining an advantage, largely due to the low interest rates for home loans, homeownership costs continuing to be affordable and the median rents stabilising,” he said.
Realmark Central director Josh Roberts said the market was indicating favourable prices for buyers. “Prices for inner-city apartments have reduced substantially over the last four years and are at levels not seen since 2004 or 2005,” he said. “By purchasing at what we believe to be the bottom of the market or close to it, you would expect to have positive capital growth if held over a long period of time – Lots of people prefer to have long-term security, which is what homeownership provides,” Mr Roberts said.