Albany Market Update – November 2021

Welcome to our quick pre-Christmas market update.  Here’s a summary of what’s happening now, and how things have looked over the last 12 months. Feel free to get in touch if you would like to talk to one of the team for more information.

As you are probably aware, the market in Albany has been pretty frantic for the last 12-18 months.  A huge number of buyers fighting over limited stock resulted in acute competition and a bit of a buying frenzy, with pressure in the market translating to increasing prices in most sectors as buyers competed for individual properties and payed more to secure them.

June 2020 saw new home incentives announced by the government in an attempt to stimulate the building sector, resulting in an instant sales boom with nearly all of the more affordable blocks across the region selling within a couple of weeks.  Although we expected a resultant dip in activity on the rest of the market, June also saw the beginning of increasing activity on established homes; this continued to pick up towards the end of the year and into 2021 with typical intra-area activity dramatically boosted by people moving to the area from elsewhere in W.A., and interstate.   We believe a large amount of activity was due to the pandemic with people from more populated areas looking for ’Covid-safe’ places to live, with activity in the market further exacerbated by historically low interest rates and exceptionally low availability of rental properties.

Throughout early 2021 the market became more and more busy, with continued very high demand and slight supply resulting in incredible competition for individual properties, particularly for those that had good appeal and were fairly priced.  That said, activity did vary across the market: there was fairly limited activity in the low end, huge volumes of turnover in the median bracket ($300k to $500k), and reasonable sales volumes in the higher end of the market, throughout the majority of 2021.  All in all activity and competition has resulted in prices going up, and days-on-market coming down.  Although REIWA data suggests the median price in the Albany Urban area has increased about 6% in the last twelve months, we have certainly seen prices increase as much as 15% and in some cases even 20% over the last 12-18 months, in certain sectors.  Days on market (days to achieve a contract from the day of listing) has sat around 100-150 for the last 10 years or so, but has come down drastically to just a week or two – in November average DOM was only 10!  The increase in price and decrease in selling time is typical for a boom market.

In recent weeks we have started to see the heat come out of the median bracket, but a huge amount of activity in the upper end of the market, even above the million dollar mark. It now seems that it is this extreme upper end of the market that is seeing terrific demand and some excellent competition, resulting in exceptional prices in some cases.

So what is the outlook?  The bottom line is who knows!  We all expected to be out of a job 18 months ago and no one saw the post covid property boom coming, so anyone thinking they can predict the market with any accuracy would be crazy.  That said we do feel like covid will create an ongoing demand for less populous areas, and that linked with strong development of amenity in Albany and a general societal move towards a ‘healthy lifestyle’ will see continued strong demand in Albany and the Great Southern.  General activity could dramatically increase when the borders open, but this could equally see a decline.  All up, we expect to see steady demand in the low and median brackets, and with a bumper harvest in progress we do expect some crazy action in the upper end of the market early in 2022.

The Elders team have been using the ‘Market Buy’ online sales platform to get some incredible results for our sellers.  Please see this explanatory video from Blair.

The below statistics & graphs are sourced from REIWA and relate to the Albany urban area as a whole.

Sales activity has been higher in 2020 and 2021 than in the previous 10 years.  The average number of sales in 2020 and 2021 (876) is almost 40% higher than the average number of sales in the preceding five years (627).

There were a total of 232 properties advertised on reiwa.com on 30 November 2021, which is 56 per cent less than levels observed a year ago.  Notably, the number of listings was already down in 2019 and 2020, and in 2021 there are only about one quarter the number of listings typically advertised at this time of year – refer to 2018 and prior.  The combination of extremely low listings, and 40% increase in sales volumes (as above) creates huge pressure in the market – there is much more competition for individual properties, resulting in properties selling faster, and prices going up as buyers pay more to make sure they secure the purchase.

Median sale price has increased as expected.  REIWA only reports a small increase in the median sales price of houses (6% in the last 12 months), and we feel this under-represents the true picture.  What is interesting is the huge jump in price for units.

Look at the numbers here rather than the graphs, which are confusing!  Again as expected due to the pressure in the market, average days to sell has dropped dramatically, sitting at around 10 days (for most properties) in 2021 compared to a typical selling period of around 100 days.  This is an exceptional result.  It is also significant that days-on-market are low across the board, not just in the median bracket as expected.  The much slower timeframe for properties under $350k demonstrates buyers are preferentially looking to secure quality homes.

There has been a huge shortage of rental properties in 2020 and 2021, which has seen rent prices increase.  The combination of lack of rental properties available, higher rents, and low interest rates, has encouraged some renters to buy their own home, and also has seen investors return to the market in strength.

All in all the data shows very clearly why the market has been frantic.  Demand up, supply down, no rentals, rents up, sale prices up….  We do expect listings to start climbing and sales to remain steady or perhaps drop off a little, and therefore also expect to see the extreme heat coming out of the market.

Thanks for taking the time to read our report.  We hope it gave you something useful!  From the whole team at Elders Albany, we wish you a fabulous festive season and a happy, healthy, and prosperous 2022.