Capital sees "a perfect storm" of strong population growth, rental challenges and building constraints
Houses in Perth were sold at a median rate of eight days last month, setting a new record and nearly twice as fast as the 15 days recorded in October 2022, according to the Real Estate Institute of Western Australia.
This unprecedented speed of sales reflects the high demand for established homes in the region, REIWA said.
“It’s a perfect storm, with strong population growth coming up against the challenges in the rental market and the ongoing constraints of building,” REIWA CEO Cath Hart (pictured above) said in a news release. “As a result, many people are choosing to buy rather [than] build or try and find a rental.”
According to Hart, buyers in the current market need to be prepared, patient, and persistent. It is crucial to have finances organised to make offers promptly when a suitable home is found, she said.
Perth home sales
In October, the suburbs of Cooloongup and Seville Grove had the fastest median selling times of three days, followed by Huntingdale at four days. Several other suburbs, including Greenfields, Coodanup, Gosnells, Kelmscott, Mandurah, Orelia, and Tapping, had a median selling time of five days.
“Many of these suburbs have been on the fastest selling list several times in the past six months,” Hart said. “Cooloongup and Greenfields have made six appearances, while Seville Grove has made four. While not on this month’s list, Armadale has also appeared four times since May. Despite recent price growth, these areas remain very affordable, which adds to their appeal.”
The Perth median house price reached a new high of $575,000 in October, representing a 0.9% increase from September and a 6.5% increase from October 2022, according to REIWA. The median unit price remained stable at $400,000 but experienced a 1.7% decline year-on-year.
Perth outperformed other capital cities in terms of growth, with a 1.6% increase in October and a 10.8% increase on an annual basis. Brisbane followed closely with 1.4% growth, while Sydney recorded a 9% increase on an annual basis.
Rental Market and Listings
The rental market in Perth continues to face challenges, with the median dwelling rent price reaching a new record of $590 per week in October. This represents a 1.7% increase from September and an 18% increase compared to the same period last year. The median weekly rents for houses and units remained stable at $600 and $550 per week, respectively.
As for rental listings, there were 1,719 properties available for rent on REIWA's website at the end of October, showing a 2.3% increase from September and no change from October 2022. However, the supply of rental properties is expected to remain low for the remainder of the year, posing a challenge for renters.
“Supply remains the greatest challenge facing the market, particularly the rental market,” Hart said. “We welcomed recent government announcements addressing impediments to supply, such as the changes to planning approvals that aim to get homes out of the ground quicker, and the introduction of a dedicated Housing Supply Unit that will hopefully prevent a repeat of current circumstances in the future.
“But, while it’s important to increase supply, we also need a legislative environment that supports investment,” she said. “Our market relies heavily on investors, they supply about 85% of properties in the private rental market. They can easily put their money elsewhere – and they will. We saw the negative effects of legislation changes after the COVID moratorium was lifted. Investors voted with their feet and left the market in droves.”
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