The Perth property market continued to inch upwards in July, with RP Data CoreLogic showing prices lifting a further 0.3%, equating to an almost 11% lift overall in the last 12 months.
According to Domain, the rate of growth is relatively low compared to other capital cities, with Perth emerging as the most affordable city in Australia. The view of REIWA and other commentators seems to be that the steady uplift in Perth prices over the last year translates to the market being in a strong position for the upcoming Spring selling season.
In the inner North, here at Red Fox, we’re seeing an increase in the Eastern States based buyer activity with investors using buyers agents as intermediaries to snap up quality properties with underlying land value. Locals are having to compete against cashed-up interstate purchasers looking to take advantage of our more affordable market.
Buyers who are still hanging back and pinning their hopes on the market softening may need to rethink their plans. Perth’s current median house price of $520,500 is still below the $545,000 peak reached in 2014, with commentators predicting growth to continue and surpass the previous peak early next year. So whilst activity may slow at some point, I wouldn’t be betting on prices falling any time soon, and certainly not back to the low of a year ago.
Houses continue to lead the market recovery, but the outlook has been brighter for units. Higher rents are turning tenants into homebuyers, and investors are returning to the market. So whilst the multi-residential properties we’re selling are still well off their peak values, we’re seeing significantly better sale prices finally being achieved – a welcome relief to those who’ve been hanging on in the hope of a long-overdue upturn.
Despite being the wettest July for 26 years, transaction activity remained strong throughout the month, with listings for sale decreasing 2.3% to reach a low of 8,374 properties for sale. The drop was most noticeable in the number of houses for sale, which fell 6.2%.
In July, the median number of selling days was 17 compared to 14 in May, reflecting a slight easing of intensity in recent months. Still, quality homes where there is a shortage of supply continue to be snapped up quickly. For example, we attracted 101 groups of buyers, which equates to over 250 people, through a character home in Inglewood, with all 7 sales for the month attracting multiple offers.
Much has been said about the Perth rental market, which was skewed by the rental moratorium in place until 31 March. According to REIWA, listings for rent have increased by 13% since the height of the shortage in December 2020. Perth’s median rent held steady in July at $425 per week. Whilst rents have increased over the year; they are still $25 cheaper than the peak in 2013/14.
The good news for the rental market is that ABS statistics show an increase in investor lending in May, up 10% over April, and a massive 209% higher than May last year. Investors had been steadily withdrawing from the market since 2014, but it’s hoped that increases in prices and yields will draw them back to the market, which will further help supply.
What interests us in terms of the Perth property market outlook is how an eventual easing of border restrictions will play out. If once the doors widen, we get an influx of ex-pats returning to WA and employment migration into the state, we may well see more substantial gains in the market. It certainly makes for interesting times ahead.