How do Perth’s property and rental markets compare to the rest of Australia?

19 February 2022

Perth’s strong market and forecast continued growth for 2022 has been welcomed after years of lacklustre activity pre-COVID.

Experts have predicted WA’s property market could face a mini property boom when borders finally reopen, but how does the performance of local real estate compare with the rest of Australia?

We take a look at how Perth is tracking in relation to other capital cities.

Price growth and affordability

In the past year, bigger cities including Sydney and Brisbane have seen incredible price growth across all dwellings, with rises of 25.5% and 29.2% respectively.

While Perth has still experienced substantial price rises, the growth has been much more subdued than cities on the east coast. Perth recorded Australia’s lowest rate of growth in the past 12 months, with an 11.2% increase collectively across the house and unit markets.

While prices continue to trend upwards, the rate of growth has waned in recent months and while experts are predicting continued growth, it is not likely to be at the same soaring levels as the past two years.

Real Estate Institute of WA President Damian Collins has forecast a 10% growth in Perth property prices for 2022.

Houses

Houses have traditionally had more pull for buyers than units, with the value of housing growth outpacing units in the past decade.

Nationally, house values rose by 24.8% in the 12 months to January, while units saw a growth rate of 14.3% for the same period.

CoreLogic Research Analyst Kaytlin Ezzy said while the national annual performance gap between houses and units had narrowed in October, November and December last year, the divide had started to widen again in January.

CoreLogic data shows Perth sustained an 11.4% boost to house prices in the 12 months to January – the second lowest increase of any capital city. Darwin’s house values rose by 8.4% in the same period.

Brisbane saw the highest growth in the past year, with a 32.8% increase, while Sydney had a boost of 29.8% and Adelaide 27.3%.

Three of the eight capital cities – Sydney, Melbourne and Canberra – now have a median house price in excess of $1 million, while Perth’s median house price is sitting at $555,851.

Units and apartments

When it comes to the unit and apartment market, where you buy is likely to dictate how much your investment may grow in value.

Hobart’s unit market was a standout performer in the 12 months to January, as median values boosted 32.8%. Darwin saw a 21.3% increase in unit and apartment values, while Sydney sustained 15.4% price growth.

At the other end of the spectrum Perth unit values rose by 9.6% in the year, while Melbourne’s prices rose the least with an 8.1% hike.

Rentals

Rents in capital cities, regional areas, houses and units have experienced incredible pressure which netted in the highest national calendar year growth rate since 2007.

In Perth, rents grew by 10.3% across all dwellings in the past year.

Darwin saw the greatest increase in rent prices with a 15.2% surge, followed by Hobart at 12.7% and Brisbane at 10.6%. Melbourne sustained the lowest increase of 4.1%.

But rental yields in all capitals, except Darwin which saw a slight increase, took a dip year-on-year. Perth’s rental yield is now 4.37%, down from 4.49% a year ago.

The verdict

While Perth has not experienced the sort of explosion in property prices as other Australian states in the past year, it remains an affordable option when it comes to purchasing real estate.

CoreLogic Research Director Tim Lawless said early indications pointed to housing markets starting the year with a similar trend to late last year.

“Values are still broadly rising, but nowhere near as fast as they were in early 2021,” Mr Lawless said.

“A softening in growth conditions has been influenced by less government stimulus, worsening affordability, rising fixed term mortgage rates and, more recently, a slight tightening in credit conditions, and a surge in new listings through the final quarter of last year.”

When you compare these prices to the likes of Sydney where the median dwelling price is $1,389,948, Melbourne at $1,002,464 or even Hobart at $759,697, Perth offers a much more affordable option. And the encouraging news is more growth is forecast to come, especially when the state borders finally open.

City 12-month growth Median dwelling price (houses & units) Median rent per week
Sydney 25.5% $1,106,279 $605
Melbourne 14.9% $798,881 $456
Brisbane 29.2% $706,594 $507
Adelaide 24.8% $584,629 $447
Perth 11.2% $531,243 $485
Hobart 27.6% $707,087 $521
Darwin 12.6% $496,476 $561
Canberra 25.5% $906,529 $651
National 22.4% $718,146 $495

 

Sources:

CoreLogic Hedonic Home Value Index, February 1, 2022

CoreLogic Quarterly Rental Review, January 2022

Share:
Previous Article
Is now the right time to invest in Perth property?
Next Article
What’s hot for 2022 when it comes to home design trends?