The CoreLogic house price index for Perth held steady in November, prompting the national property market experts to state:
The Perth and Darwin markets are yet to record any signs of a material reversal in housing prices
The reason, they said, can be attributed to:
A comparatively healthy level of housing affordability, along with tight labour markets and relatively strong economic conditions, have helped to insulate these cities from the downturn so far.
REIWA CEO Cath Hart concurs regarding the strength of WA’s position, saying that:
The Western Australian economy and finances are among the strongest in the world. The population continues to grow and WA has one of the lowest unemployment rates in the country.
A comparison of Perth’s performance for the month compared to other capital cities is below:
And if we look at the quarterly change the resilience of the Perth market is even more evident.
As stated in our September update, we expect to continue to see month-to-month variations (and suburb-to-suburb variations) in price as consumer sentiment reacts to interest rate rises and ongoing negative headlines regarding the ‘Australian’ property market.
It’s widely reported that consumer sentiment is now as low as it was during the initial COVID lockdowns and the last GFC.
What’s been encouraging to see is the minimal level of overall market reaction in Perth where the index has hardly changed since rates started rising back in May.
Happily, for us here at Red Fox, November was a bumper month with a total of 13 sales – our best-ever result for both the Agency and Natalie personally.
As of the end of November, there were 8642 properties available for sale in Perth, which is 5.8% higher than the end of last month, but 5.1% lower than the same time last year.
The median time to sell a property in Perth was 15 days in November, remaining unchanged from September and October. Those low days on market still favour sellers, as do stock levels, with both remaining well below balanced market levels.
We continue to be confident that local fundamentals – the strong WA economy, low unemployment rate, anticipated population growth, and the current shortage of housing supply, will continue to support prices.
So what about the rental market?
The median remained unchanged in November at $500 per week following a further $5 rise in October. Rental stock levels are now 20.5% lower than a year ago.
REIWA notes that:
Both net interstate and overseas migration are in positive territory for the first time since 2013 and, as many migrants prefer to rent initially, this is seeing increased demand and competition for rentals. This in turn is maintaining pressure on prices.
The median time to lease a property in November was 14 days, one day faster than in October and three days faster than three months ago.
We continue to be of the view that tenants in a position to buy should consider exploring their options to achieve greater housing security. We see great value and opportunity in the local multi-residential market, where prices in some cases are still well below previous highs.
If you’re thinking about investing, now provides a great window of opportunity. Anecdotally, we’ve noticed a rise in investors attending home opens.
Our expectation is that sales activity will slow considerably by mid-December – we’re likely only launching one new home this month and have only a few recently listed properties remaining.
Past experience tells us that stock levels will drop further over the next few weeks as sellers remove unsold properties from the market prior to Christmas. Stock levels and activity will increase again from mid-January when sellers and buyers return to the market.
We’re keen to see what 2023 brings!