2023-07-22-莱坊-Perth_Prime_Residential_Insight_Q2_2023_3页_727kb

Perth Prime Residential Insight Summary (Q2 2023)

Core Content

This document provides an analysis of the prime luxury residential market in Perth, focusing on sales, rental performance, and broader economic and wealth trends influencing the market. It also outlines forecasts for the next few years, based on data from Knight Frank and Oxford Economics.

Wealth Trends

• Millionaire Population Growth:
  Perth's high-net-worth individual (HNWI) population increased by 4.2% in 2022, reaching 199,110 individuals with net wealth over US$1 million.

  • This represents 9.0% of the total Australian HNWI population, down slightly from 9.5% five years ago.
  • The population is projected to grow by 61.3% by the end of 2027, with Perth expected to hold 8.5% of all Australian millionaires.

• Ultra-High-Net-Worth (UHNW) Population:

  • The UHNW population in Perth declined by 1.8% in 2022 to 1,716 individuals with net wealth over US$30 million.
  • From 2017 to 2022, the UHNW population in Perth grew by 24.7%, though it has fallen behind the Australian growth rate of 31.3%.
  • The UHNW population is forecast to grow by 83.9% over the next five years, outperforming the Australian forecast of 40.9%.

Economic Outlook

• WA Economic Growth:

  • WA recorded 3.1% economic growth in 2022.
  • Forecast for 2023: 4.3%, 2024: 2.8%, 2025: 3.1%.

• Unemployment Rate:

  • Perth's unemployment rate was 3.8% in 2022, up by 6 bps from the previous year.
  • Forecast for 2023: 3.9%, 2024: 4.2%, 2025: 4.1%.

• Stock Market Performance:

  • The S&P/ASX 200 rose 2.0% in Q1 2023, but fell 4.5% over the past year.
  • Forecast for 2023: 2.4% rise, 2024: 4.2%, 2025: 3.0%.

• Company Profits:

  • Company profits in Australia grew by 19.2% in 2022 and 5.6% in 2021.
  • Forecast for 2023: -3.0%, 2024: -3.8%, 2025: 2.4%.

• Private Business Investment:

  • New private business investment grew by 6.6% in the year to March 2023, up from 4.6% six months earlier and 3.2% a year ago.

Lending Environment

• Official Cash Rate:

  • The RBA raised the official cash rate by 50 bps over the past three months, reaching 4.10% as of 6 June 2023.
  • Forecast for 2024: The rate is expected to decrease to an average of 3.94%.

• Mortgage Lending Rates:

  • In the March 2023 quarter, mortgage rates for owner occupiers increased by 3 bps to 6.27% for a 3-year fixed term and 50 bps to 8.02% for a standard variable loan.
  • For investors, the 3-year fixed term rate decreased by 1 bps to 6.32%, while the standard variable loan rate rose by 50 bps to 8.60%.

Prime Residential Market Performance

• Sales Volume:

  • Annual prime residential sales in Perth increased by 9.9% compared to the previous year, with 709 sales recorded.
  • Quarterly sales volume decreased by 14.9% in the March 2023 quarter, with 171 homes sold.
  • Average days on market increased to 77 days in March 2023, up from 71 days in the previous quarter.

• Price Performance:

  • Prime residential prices rose 0.5% over the year to March 2023, but fell 0.1% in the past quarter.
  • Annual price growth is forecasted to be 1% in 2023, 2% in 2024, and 3% in 2025, averaging 2% over the period.

• Rental Market:

  • Prime rental prices increased by 5.0% in the March 2023 quarter and 10.9% over the past year.
  • Gross rental yields rose by 13 bps to 2.03% in Q1 2023.
  • Annual rental growth is forecasted to be 13% in 2023, 8% in 2024, and 6% in 2025, averaging 9% over the period.

Key Forecast Highlights

Conclusion

Perth's prime residential market continues to show resilience despite broader economic headwinds. The growth in the HNWI population, combined with improving business conditions and stable rental performance, suggests a positive outlook for the market. However, mortgage rates and company profits are expected to fluctuate, which may impact buyer behavior and investment decisions. Overall, Perth is expected to maintain a significant share of Australia's ultra-wealthy population and its prime real estate market is projected to grow modestly in the coming years.