April’s prolonged warm spell fueled further heat in the Perth property market, again leading Australian house price increases for the month.
From houses to units, the month saw steady growth and strong demand, painting a rosy picture (if you’re a property owner) of what’s to come in 2024 despite interest rates and economic challenges.
Here’s the Red Fox lowdown on what happened:
Sales Market
House Prices: According to REIWA, April’s median house price rose to $630,000, a 1.6% increase from March’s $620,000 and a 14.5% increase over the twelve months.
CoreLogic reports the April increase was 2.0%, and 21.1% for the year, with a median dwelling value now of $721,278.
Either way, there’s been a lot of price movement in the market. We’re getting anecdotal feedback from valuers that the top end is slowing, but with supply levels so tight, the pressure will remain on prices for a while.
A buyer recently described trying to secure a home as like being in a blood sport. They’re not wrong. It can be brutal out there.
Unit Prices: The median unit price also rose, up 2.7% to $426,000 in April, showing a 6.5% increase year on year.
Unlike houses, units have yet to surpass their previous peak of $450,000, set in 2014, according to REIWA. We think it won’t be long before they do based on the activity we’ve seen in recent months. And in the inner north, we think they already have.
Time on Market: Houses sold in a median of 8 days in April, consistent with March and 6 days faster than April 2023. Units sold in a median of 11 days, one day slower than March but 16 days faster than a year ago.
These figures are for Perth overall. Locally, we’re seeing larger turnouts at our home opens for units now than for houses, again demonstrating that the unit market, which had been lagging in it’s recovery, is now in bloom.
Listings for Sale: Active listings settled at 3,636 by the end of April, a 1.3% increase from March but 43.6% lower than the previous year.
While the overall stats tell us that there’s not much seasonal variation in sales activity in Perth, we have noticed a slowdown in the number of sellers planning to come to market now that Easter is over and we’re coming into Winter. Traditionally, the June quarter for us is (marginally) quieter than March, so it will be interesting to see what the change of seasons brings for stock levels.
If you’re considering selling and want to avoid competition, now is the time!
2024 Market Outlook
REIWA’s recent quarterly update indicates the potential for a 20% increase in Perth’s median house sale price by the end of 2024. And we don’t disagree. With CoreLogic data reflecting a quarterly increase of 6.0% already, the steady growth and underlying market conditions point to more upside in prices over the rest of the year.
This is great news for property owners, but likely disheartening for buyers. If you’re looking to buy, the longer you put off securing something, the more expensive it’s likely to be. And you’ll have to fund that difference from savings, take out a larger mortgage, or adjust your search parameters to fit your budget accordingly. It won’t be easy.
Rental Market
Rents: The median weekly dwelling rent reached $650, marking an 8.3% increase over the quarter and an 18.2% increase from April 2023.
The unit rental price similarly grew, reaching a median of $600 per week, a 20% increase from 2023. This is one of the reasons we think the unit market has become so popular—people are understandably trying to escape the rental market and secure a permanent roof over their heads instead.
Listings and Vacancy: Rental listings remained low, with the vacancy rate dropping to a record low of 0.4%. You think trying to buy is difficult? Spare a thought for those on the hunt for a rental!
Conclusion
The Perth property market’s performance in April demonstrates continued strength and resilience. Despite economic challenges, limited supply and continued population growth means the market remains robust, with expectations for sustained growth in the sales and rental sectors throughout 2024.
