When interest rates started rising, there were countless predictions that rates of mortgage distress and home sales would increase, and demand and property prices would plummet.

Here in Perth, that hasn’t happened.

Instead, house prices have risen 3.2 per cent for the year ending April 2023, and we’re looking at our lowest levels of properties on the market since June 2010.

So why are stock levels so low?

At Red Fox, we think there are three reasons.

First, people don’t want to sell because they can’t find anything they want to buy. Because people aren’t selling, people aren’t selling.

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Second, is the shortage of rentals. Clients we speak to are worried about selling and ending up homeless. If they can’t find something they want to buy, and there are so few homes for rent, what do they move to?

Third is affordability. Eighteen months ago, more people could afford to trade up to a higher-priced property; now, it’s less so. Rate rises have impacted people’s borrowing capacity, so more people have to stay where they are rather than move to a larger home or more expensive suburb.

Will it change any time soon? We don’t think so. With increased migration set to continue, supply will likely stay low for a while yet. While the recent State Government initiatives to boost housing supply and diversity are welcome, it will take time for the results of those programs to flow through to the market. 

So expect the lack of quality stock to continue for the foreseeable future. And for in-demand homes to continue to sell quickly and attract multiple offers.