"Supply is a significant issue facing the market and impacting affordability"
In September, Western Australia experienced a significant surge in demand for homes, resulting in a drop in listings for sale to the lowest level in 30 years, according to the Real Estate Institute of Western Australia.
REIWA CEO Cath Hart said the month saw several new records set in the Perth housing market.
“The median house price rose to $570,000 in September, which is 5.6% higher than a year ago and 4.6% higher than the previous record set in 2014-15,” she said. “The strength of demand was highlighted in the median time to sell a property, which dropped to a record low of nine days for the month. This saw the number of listings on www.reiwa.com fall to 4,931 at the end of the month. This is 4.9% lower than the final figures for August and 39.5% lower than 12 months ago.”
While the median house price saw a notable increase, the median unit price remained stable at $400,000. It registered a 2.4% decrease compared to September 2022 and was 2.9% below the previous high of $412,000 set in 2021-22, according to REIWA.
Analyzing the data provided by REIWA, the top-performing suburbs in terms of house price growth in September were Halls Head, Embleton, Hillarys, East Fremantle, and Bassendean. These suburbs recorded growth rates ranging from 2.1% to 3.1%. Additionally, suburbs such as Westminster, Balcatta, Rivervale, Golden Bay, and Doubleview also experienced growth rates above 1.4%.
Time on market
In terms of the time spent on the market, Dudley Park and Seville Grove emerged as the fastest-selling suburbs for houses, with properties being sold within just three days. Coodanup, Cooloongup, Secret Harbour, and several other suburbs recorded sales within four to five days.
These suburbs have median house prices below the overall Perth median, indicating the importance of affordability in driving quick sales, REIWA reported. Moreover, these suburbs also offer attractive rental yields ranging from 5% to 7%, making them appealing to investors.
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According to the CoreLogic Home Value Index, Perth ranked among the top three performers for September, with a growth rate of 1.3% over the month. Adelaide recorded the highest increase in dwelling values at 1.7%, while Brisbane also saw a growth rate of 1.3%. In the year leading up to September, Perth emerged as the strongest-performing capital city, witnessing a significant rise of 8.8% in dwelling values. Sydney followed closely behind with a growth rate of 7.3%.
Rental market
Turning to the rental market, Perth's median rent prices remained at record highs in September. The median weekly rent for dwellings stood at $580, unchanged from August and reflecting a substantial increase of 17.2% compared to the previous year. The median rents for houses and units remained stable at $600 and $550 per week, respectively, according to REIWA. However, market conditions suggest that further increases are likely in the coming months due to strong demand and limited rental supply.
REIWA reported that Highgate, Inglewood, Greenwood, Wembley, and Bentley were the suburbs that experienced the most growth in median rent prices in September, with increases ranging from 19% to 30%.
At the end of September, there were 1,653 properties available for rent on the REIWA website. While this represents a slight improvement from August, it is still 22.2% lower than three months ago and 4.1% lower than September 2022. Based on previous trends, it is anticipated that listings will remain low for the remainder of the year.
The median leasing time for rentals in September was 14 days, one day faster than August. Byford and Melville emerged as the suburbs with the fastest median leasing times, both recording an average of eight days. Several other suburbs, including Thornlie, Hamilton Hill, Nedlands, Padbury, and Willetton, followed closely behind with median leasing times of nine days. Clarkson, Doubleview, and Yanchep had median leasing times of 10 days.
Hart said that while Western Australia remains one of the most affordable places in the country for both home buyers and renters, rising interest rates and rents have placed significant financial stress on households.
“The Reserve Bank of Australia’s decision to leave interest rates on hold will be welcomed by mortgage holders, but repayments on the average mortgage in WA have increased 48% since rates started rising,” Hart said. “Meanwhile the median dwelling rent has increased 23%. Supply is a significant issue facing the market and impacting affordability. We need to maintain a strong level of new home building starts and ensure we have a legislative environment that encourages investment to alleviate the gap between supply and demand that is driving house and rent prices to new records.”
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