Perth reached a median house price of $510,000 at the end of May, with reiwa.com figures showing growth for a tenth consecutive month and a rise of 10% since July 2020.
Reiwa are projecting the median house price will hit $545,000 by the end of the year, a further increase of just under 7%. Properties are reportedly selling at their fastest rate in 15 years, with the median time to sell now as low as 14 days.
What buyers and sellers need to be mindful of is that the rates of increase aren’t across the board, with some suburbs and property types performing very differently from others.
Last week we sold a home in Karrinyup for just over 29% more than what the sellers had paid for it at the end of 2018. I’ve also had reports of an estimated 23% difference in price between March 2018 and May 2021 in a recent sale in Inglewood. Both of these suburbs are very popular with trade-up buyers and the homes sold typical of the type that attract high levels of buyer demand. They also benefitted from extremely low, or no, competition.
May saw a slight increase in the number of listings for sale, reaching 9020 at the end of the month, the first time it has sat above 9000 since November last year. The increase likely reflects ex-rental stock coming onto the market following the end of the rental moratorium, as well as people hoping to sell their properties for a more competitive price than in recent years.
Whilst in the inner North the prices for units, villas, and apartments have improved, the level of increase is typically lagging well behind houses. There are exceptions to this, however, and first home buyers and investors targetting this section of the market need to be aware that the window of opportunity is closing.
Pressure on rents eased during May with the median rent price holding steady and listings for rent increasing by 3.8%. Four percent more properties were leased during May than in April with the time to lease holding steady at 18 days.
Despite the recent increases, WA is still the most affordable state for both buying and renting according to the Real Estate Institute of Australia’s (REIA) latest Housing Affordability Report. Whilst it’s acknowledged that affordable housing is out of reach for some in WA, the proportion of family income needed to meet loan repayments in the March 2021 quarter was calculated to be 24.8%, versus 43.5% in NSW, and for rents, it was 18.7%, versus NSW’s 28.6%.
It will be interesting to see what the rest of 2021 holds and where things head into 2022. With the local unemployment rate continuing to fall, and the WA economy having largely recovered from the impacts of COVID-19, there’s good reason to be optimistic about the short and medium-term market outlook for the Perth market. I think the days for a bargain are now long gone, and wouldn’t be betting on a correction any time soon.
Natalie Hoye is the Founder and Licensee of Red Fox Property Group – a boutique agency doing things differently in the suburbs surrounding Beaufort Street. We call what we do ‘real estate alchemy’: a genuine blend of science and intuition, marketing and magic, head and heart. The Red Fox Way. We’d love to chat with you about your local real estate needs. Call us now on 0405 812 273.