What’s in store for the Perth property market in 2023?

Perth’s resilient property market is expected to buck the national trend of decline in 2023, amid predictions of moderate growth throughout the coming year.

The Real Estate Institute of WA has estimated house price increases of between 2% and 5% for Perth over the next 12 months, fuelling hopes of more prosperity than bigger capitals across the eastern seaboard.

The latest CoreLogic Hedonic Home Value Index, released in early January, shows Perth was the only Australian capital to sustain an increase in property values in December, with a small 0.1% rise.

The city rounded out 2022 with 3.6% growth – one of three capitals to end the year with positive growth, along with Adelaide (10.1%) and Darwin (4.3%).

The median dwelling value in Perth is now $560,902 – the second most affordable capital in the country to Darwin, which has a median of $506,710.

CoreLogic research shows Perth’s house values are still well above pre-COVID levels. Since the onset of the pandemic, prices skyrocketed by 25.9% but have slipped by 0.6% since the peak in July last year.

Mont Property Managing Director Matthew Podesta said Perth had proven itself as one of the most robust real estate markets in the country, with the median property price increasing despite eight consecutive interest rate rises since May last year.

“The uplift in prices and positive momentum that Perth’s property market is displaying is expected to continue well into 2023,” Mr Podesta said.

“East coast markets have been more heavily impacted by last year’s interest rate rises, in many cases recording falls in their median property values. On the flipside, Perth has remained stoic, taking the interest rate hikes and threat of ongoing rises in its step.

“I expect the new year will bring renewed interest, more listings and strong competition for quality homes.”

REIWA Chief Executive Officer Cath Hart said while listing levels were 10% lower than this time last year and 34% down on three years ago, she expected sales volumes to remain strong in 2023 on the back of building completions in the next 12 to 18 months.

Ms Hart said further interest rate rises were unlikely to significantly impact the WA market, compared to other states. Demand would stay strong, supported by population growth, she said.

The forecasts come despite the series of interest rate rises last year, with experts predicting a nineth increase in February when the Reserve Bank of Australia next meets. Interest rates are now at a 10-year high.

“WA buyers have become more cautious and price sensitive following eight consecutive interest rate increases in 2022,” she said.

“But so far, the local market is weathering interest rate changes well, supported by a strong economy, low unemployment and continued population growth.

“In addition, housing affordability has allowed buyers and mortgage holders to absorb interest rate rises.

“We are closely watching what the RBA does but are cautiously optimistic for the outlook in WA over 2023 based on current conditions.”

If a real estate transaction is on your mind in 2023, then feel free to contact our team.