Perth property market leads the way with strength and resilience

6 May 2023

Perth’s robust real estate market is showing real resilience, emerging as one of only two Australian capital cities to record positive growth over the past 12 months.

The CoreLogic Hedonic Home Value Index, published on May 1, shows Perth, along with Adelaide, sustained 1.3% growth in the year to April, while all other states showed negative growth, with the biggest about-face of 12.7% in Hobart and 10.7% in Sydney.

In April, Perth home values grew by 0.6% – the second highest increase of an Australian capital city. Sydney property prices saw the largest growth of 1.3% in April.

The median dwelling price in Perth is now $572,837 – the second most affordable capital city, behind Darwin.

It comes as CoreLogic signalled that the Australian housing downturn may be over, with evidence that housing values had ‘bottomed out’ after a second consecutive monthly rise.

Mont Property Managing Director Matthew Podesta said Perth’s housing market was showing strength and resilience.

“Perth is sitting pretty as a prime performer, experiencing solid growth while still remaining one of the country’s most affordable cities when it comes to buying real estate,” Mr Podesta said.

“And there is plenty of growth and good times still to come.”

In Perth, values surged by 24.5% between the onset of COVID in 2020 and the city’s peak in July 2022, but prices have declined by 0.9% since then. CoreLogic said Perth hit its most recent trough in February this year.

It comes as recent Real Estate Institute of Western Australia analysis shows that eight local Mont suburbs now have median house prices of more than $1 million.

In Applecross, the median house price is now $1.8 million, East Fremantle stands at $1.537 million, Attadale at $1.5 million, Mount Pleasant is $1.3775 million, Bicton $1.3 million, Ardross at $1.16 million and Booragoon at $1.13 million.

Rental growth for houses in Perth is leading the country. Data shows rents for houses grew by 13.1% in the year to April, while unit rents grew by 13.6% – the fourth highest change after Sydney, Brisbane and Melbourne. The rental yield for Perth is now 4.9%.

REIWA figures show Perth’s median dwelling rent price was $550 per week for April – $80 higher – or 17% more – than April 2022.

On Tuesday, the Reserve Bank of Australia lifted the cash rate another .25 percentage points to 3.85% after a month’s pause. It marks the 11th interest rate rise in the past year, putting more pressure on homeowners amid growing mortgage repayments and cost of living pressures.

REIWA Chief Executive Officer Cath Hart said the strong demand for houses was reflected in the selling time, with houses selling in a median 14 days in April, while units took a median 26 days.

“In this tight market it’s worth considering that units can be a more affordable option for buyers and renters,” Ms Hart said.

“They’re a good step for first-home buyers looking to get into the market and can potentially be rented out in the future and used to provide equity for a future second home.”

CoreLogic Research Director Tim Lawless said it was becoming increasingly clear the national housing market has moved through an inflection point.

“Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift. Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average,” Mr Lawless said.

“This could be contributing to a broader perception that the market has bottomed out, and for those attempting to time the market, that it is considered to be a good time to buy.”

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