Home loans in Perth
Mainly a city based on mining, Western Australia’s capital, Perth, is located in the south west of the state. Most of the city’s population live along the coast and near the Swan River. In addition to being a popular tourist destination, Perth’s economy is driven by the service and resources sector with the majority of residents working in state and council employment centred in the city. Perth’s property market prices vary due to external national and international economic factors. The property and home loan sector is regulated by the federal and Western Australian governments.
What is Perth’s housing market and economy like?
The city’s property market and economy is heavily reliant on its core industries, traditionally being mining and, in recent years, service roles. Employment and the property market can tend to fluctuate with these industries. Therefore, a change of government or a drop or increase in commodity prices can have a large impact on the city.
Due to the mining downturn in recent years the Perth economy has declined slightly, with residents, business leaders and politicians looking for new industries to fill the void of the resources and mining sector. As you can imagine, due to lessening demand and decreasing employment and income levels, property prices have fallen. This is expected to improve over the long-term.
How does Perth differ from other capital cities in Australia?
Due to its size and distance from other main metropolitan centres, Perth sees less demand for property than Melbourne, Sydney and Brisbane. It also has more land available for residential and industrial developments and is not suffering from a housing shortage. Similarly, house prices are on average lower than those in comparable cities. Due to its vulnerability to external economic factors, Perth’s economy and property market tends to fluctuate more than Sydney’s and Melbourne’s, with the larger cities experiencing steady demand despite the state of the national and international economy.
Why should I consider getting a home loan in Perth?
Perth’s property market is extremely affordable if you are looking to live in a capital city. You will also find - compared to Brisbane, Melbourne and Sydney - properties in popular locations, such as overlooking the river or close to the CBD will be cheaper. Also, being less densely populated, Perth is generally more lifestyle friendly with more parking spaces and less traffic congestion. The home loan market is similar to those of other capital cities with comparable - if not the same - regulations and requirements for getting a home loan.
What potential problems will I face?
Perth is a boom and bust economy closely aligned with the commodities sector. As such, you could have difficulty selling during a downturn.
If you have stable employment, Perth’s property market is a buyers’ market with relatively affordable housing options. Perth’s climate is also milder than other capital cities and it suffers less extreme weather events. However, being on the coast, flooding and high levels of rainfall can occur and there is a risk of major fire events.
You should expect to pay similar fees and charges, such as stamp duty, land taxes and rates, as other cities in Australia. Perth has a strong connection to Aboriginal and Torres Strait Islander people so depending on the type of property you are considering purchasing, you will need to research native title laws and regulations.