WA home values continue to rise in traditionally slow January, as lofty rents stabilise
Perth’s real estate market has bucked the traditionally slow start to the new year, with January sales prices sustaining the biggest monthly increase since May 2021.
CoreLogic’s Hedonic Home Value Index, released on Tuesday, shows Perth property values rose by 0.6% in January, resulting in an 11.2% boost to prices in the past year.
The data signals a strong start for the 2022 property market at a time when activity is usually quiet after the festive season.
Real Estate Institute of WA President Damian Collins said the data was positive news for the Perth market where properties were also selling faster. In January, the median time to sell a house was 15 days – twice as fast as ‘normal’ selling conditions.
“Demand has been strong in the first month of the year. If this continues, the Perth market is on track to achieve the 10% price growth that REIWA forecast for 2022,” Mr Collins said.
“Median selling times are still exceptionally low and have been for some time now. We’d normally expect this figure to be up around 30 to 40 days, so the fact it continues to hover around the two-week mark is a testament to how tight competition for properties is in Perth.”
The supply shortage had eased marginally, he said.
“We’ve seen a slight increase in the number of properties for sale in Perth during January, as sellers who deferred their listings over the break come back to market ready to take advantage of Perth’s strong buyer appetite.”
In the WA rental market, which has seen epic price growth in the past year or so, now appears to have stabilised. REIWA said after rents peaked at 16.9% in June 2021, January had seen a slowing of rent rises to 8.8%.
CoreLogic said WA’s extended state border closures and disruptions to interstate migration had impacted the local property market, with WA experiencing more subdued growth than that seen in other markets on the eastern seaboard last year.
But CoreLogic Research Director Tim Lawless said this week’s announcement by the Reserve Bank of Australia about a potential cash rate rise later this year remained a downside risk for housing.
“A growing chorus of economic commentators are forecasting a rate rise later this year and financial markets have the first lift fully priced in by mid-year,” Mr Lawless said.
“Despite the growing downside risks to the housing sector, other factors should help to offset a significant downturn,” he said.
“As the economy strengthens and labour markets tighten the risks around mortgage stress or default should lessen. Open international borders will help to support demand, initially from a rental perspective, but longer term for home purchasing as well.”
Mont Managing Director Matthew Podesta said heavy demand for homes remained and he expected the Perth market to surge further once WA’s borders reopened. But a lot depended on whether the forecast interest rate rise translated.
“Mont has seen massive demand and some incredible sales results in the past year and everything points to another rush once the WA borders reopen,” Mr Podesta said.
“We will just have to wait and see any impact the projected interest rate rise might have on the local market.”
The median dwelling value for Perth is now $531,243.
If buying or selling is on your agenda this year, contact the expert team at Mont.