Mandurah to lead WA apartment market recovery: Moody's Analytics

Mandurah to lead WA apartment market recovery: Moody's Analytics
Mandurah to lead WA apartment market recovery: Moody's Analytics

The Perth housing market is doing better than expected, supported by lower interest rates and the continued strength of non-rural commodity prices, according to Moody's Analytics.

They forecast the Greater Perth area's house values to increase by a total of 6.4% over 2020 and 2021, after a -6.9% decline in 2019. 

Similarly Greater Perth apartments are expected to see a recovery too, albeit smaller, with a total growth of 4.8% over 2020/2021. However, this follows a decline of -7.3% in 2019.

The outlier however is Mandurah, with growth of 12.9% forecast in 2020 and 8% in 2021, off of the back of 4.3% in 2019.

Mandurah is the only region in WA which apartments are forecast to see growth during 2019.

Moody's said growth in housing values is because the labour market in Western Australia has been comparatively weak for some time, with the growth in employment lower than the national average since 2015.

The unemployment rate in the state is among the highest in the country, 6.1% in April compared with the national average of 5.1%, and wage growth remains the lowest of all the states on a year-over-year basis.

Mandurah to lead WA apartment market recovery: Moody's Analytics

Perth-Inner is expected to experience the steepest fall this year in house values but will recover slightly in 2020.

Meanwhile Perth-North West and Perth-Inner are expected to have the greatest price falls in apartments this year, with the fall flowing through to next year as well for the former region.

"Rental values fell more than 20% peak to trough from May 2013 to November 2017, a sign of continued excess supply," the report said.

"A slow recovery in rental value over the next two years will help the housing market recover."

Perth-North West, encompassing Joondalup, Stirling and Wanneroo, is representative of the trends across Greater Perth.

Mandurah to lead WA apartment market recovery: Moody's Analytics

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Perth Western Australia

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