Perth lags in house price growth

Perth recorded another increase in house prices during May, but failed to keep pace with the growth recorded in Australia’s other major housing markets. 

CoreLogic’s national Home Value Index was up 2.2 per cent over May – a stronger result than the month prior (1.8 per cent growth), but lower than the 32-year record achieved in March, when the index spiked by 2.8 per cent.

Sydney recorded the highest growth in housing values for May (3 per cent), followed by Brisbane (2 per cent), Adelaide (1.9 per cent) and Canberra (1.7 per cent).

Perth recorded the lowest growth in house prices of all major capital cities, up 1.1 per cent.

CoreLogic research director Tim Lawless said despite consistently strong headline results, the underlying trends had shifted over the past year.

“The most expensive end of the market is now driving the highest rate of price appreciation across most of the capital cities, whereas early in the growth cycle it was the most affordable end of the market that was the strongest,” Mr Lawless said.

“From a geographic perspective, it was the smaller capital cities that led the housing market out of the COVID slump, but now Sydney has risen through the ranks to record the largest capital gain over the past three months with values up 9.3 per cent.”

The fundamentals driving the strength in the housing market remained in place, he said.

“The combination of improving economic conditions and low interest rates is continuing to support consumer confidence which, in turn has created persistently strong demand for housing,” Mr Lawless said.

“At the same time, advertised supply remained well below average. This imbalance between demand and supply is continuing to create urgency amongst buyers, contributing to the upwards pressure on housing prices.”

Real Estate Institute of Western Australia president Damian Collins said May’s results brought Perth’s price growth to seven per cent for the first five months of the 2021 calendar year and 10 per cent since July 2020.

Reiwa.com data shows Perth’s median house sale price for May was $510,000, with 81 suburbs recording house sale price growth during the month.

“The top performers were Attadale (up 4.9 per cent to $1.25 million), Scarborough (up 3.8 per cent to $755,0000), Melville (up 3.6 per cent to $860,000), South Lake (up 3.6 per cent to $400,000) and Hamilton Hill (up 3.5 per cent to $490,000)," Mr Collins said.

“Nedlands, Atwell, Craigie, Floreat and Bicton also performed well.”

Perth’s median selling time for May was 14 days, sitting close to 15-year lows, Mr Collins said.

By the end of May, there were 9,020 Perth properties listed for sale on reiwa.com.

“This is 0.8 per cent more than there were at the end of April and 14.9 per cent more than three months ago. The figure for May is also the first time we have seen listings sit above 9,000 since November 2020,” Mr Collins said.

“Given the buoyancy of the Perth sales market, more and more people are recognising that there is good opportunity to sell their home for a competitive price which is leading to an increased number of properties on the market.”

Rental market stable

Perth’s median rent price remained stable during the month, unchanged at $420 per week, while listings for rent increased 3.8 per cent.

According to reiwa.com, the median time to lease a property during May was 18 days, with 2,891 properties leased during May – up 4 per cent on April.

“This is only the second time this year that we’ve seen the median rent price remain unchanged. The increase in listing volumes coupled with stable rents suggests the challenging market conditions facing tenants are beginning to ease,” Mr Collins said.

“While the rental market has some way to go before it balances out, the signs are encouraging that we are on the right track. Since the moratorium ended in March, we’ve seen investor activity start to build again, as evidenced by last month’s ABS investor finance figures, which is producing more rental stock and helping to slow down rental price growth.

“Not only are listings up 3.8 per cent for the month, but over the last three months we have seen rental listings increase 7.4 per cent, which is quite substantial after a long period of declines.”

Rental price increases were recorded in 29 suburbs, including Alkimos, Halls Head, Gosnells, Rockingham and Nollamara.

The suburbs that recorded the largest increase in leasing activity during May were Secret Harbour (up 78 per cent), Piara Waters (up 60 per cent), Halls Head (up 57 per cent), Clarkson (up 55 per cent) and Wellard (up 43 per cent).