The January 2024 property stats are out, and they’re saying the Perth market is as hot as this week’s heatwave – a 1.6% rise for the month pushing values up 16.7% for the year, according to CoreLogic.

They further report that since the onset of COVID, Perth prices have risen 49.9%. If you bought in 2019/early 2020, you’ll likely be as happy as a Swiftie scoring front-row seats.

Prices are up, but stock levels aren’t

New listings are being snapped up faster than re-released Rotto accommodation. There were 3860 properties on the market the week ending the 28th of January, compared to 7,137 at the same time last year. Ouch.

Typically, we see more stock coming onto the market after the end of Jan once the school year commences. Here at Red Fox, we’ve got a strong pipeline of homes coming soon, which is excellent, but when you’re attracting as many as 33 offers for one property, a small bump in supply isn’t anywhere near enough to satisfy overall demand.

We can’t blame the Eastern States investors

Not in the inner North, anyway. REIWA and market pundits have noted that the current hotspots for Eastern States investors are the suburbs with low median prices where rents have shown significant increases.

That property we had 33 offers on? Only one buyer was from the Eastern States. The rest were local, almost all looking to owner occupy. With low levels of building approvals, only 15,000 to 16,000 are forecasted for completion this financial year; not enough homes are being built to accommodate existing demand or our growing population.

As property prices increase and rental yields fall, Eastern States investors will start looking elsewhere. REIWA reports this has already started to happen in some areas.

House prices are rising faster than units

If you own a unit or apartment, you might have felt like house prices bolted while your horse was strapped to a cart.

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Anecdotally, in the inner north, we think that’s changing. Recent interest in our newly launched units has been incredibly encouraging, with increased buyer numbers at home opens, higher numbers of multiple offers, and sale prices outstripping the most recent results in their groups.

That said, buyers are still cherry-picking. Selling a unit while it’s tenanted is unlikely to get you the best result. And if there’s a long lease in place, your buyer pool will be significantly reduced. Most of the units and apartments we’re selling are going to owner-occupiers (a trend that will place further pressure on the rental market), and they’re looking for well-presented properties with vacant possession – many buyers are being pushed out of their rentals and don’t have time on their side.

Strap in…

As we reported last month, REIWA are projecting a further 10% rise in prices this year. With recent inflation figures fuelling talk of the possibility of interest rate reductions later in the year, continued rising rents, and population growth, we think the market will grow in confidence, more people will switch from renting to buying, and supply will continue to fall short of demand.

We don’t see a slowdown in the sales or rental markets happening any time soon.

Our best advice if you’re trying to rent or buy is be organised, be patient, be persistent, get to know your local agents and property managers, and don’t take your eye off the prize.

Good luck.