IT is the best time to buy in Perth since 2013, according to the REIWA Curtin Buy-Rent Index for the March quarter 2018.
The index assesses whether it is better to buy or rent based on past and current trends in the economic and property market climate.
REIWA president Hayden Groves said the March quarter index showed the annual rate of house price growth required over 10 years to break even had declined from 3.3 per cent to 3.1 per cent over the quarter, suggesting an improvement for prospective homebuyers weighing up the decision.
“To put that into perspective, Perth’s annual house price growth rate has been 5.9 per cent for the last 15 years,” he said.
“Based on the March quarter Index, house prices in Perth would only need to grow by more than 3.1 per cent annually for buying to be considered more financially beneficial than renting.”
In dollar terms the median house price would need to increase from the $510,000 recorded in the March quarter to over $695,264 by the end of the next 10 years for the buying decision to be considered more financially beneficial than renting.
Mr Groves said the improvement in buying conditions could be attributed to the Perth median house price softening by 1.9 per cent during the March quarter, while the median house rent price increased $5 to $360 per week.
“We also saw the 10-year average mortgage rate drop to 6.43 per cent, which means home owners 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.”
Curtin University School of Economics and Finance property researcher and senior lecturer J-Han Ho said the data indicated a continued improvement for home buyers in the near future.
“Our analysis shows home buyers gaining an advantage, largely due to the low interest rates for home loans, home ownership costs continuing to be affordable and the median rents stabilising,” he said.