Strong demand continues in Perth’s residential market
Perth continues to see the demand for housing outweigh available supply with the number of listings continuing to track lower than a year ago. There were an average of 7,177 properties listed for sale in February 2023, which is down from an average 7,943 in the same week 12 months prior.
In February, we saw national house prices start to flatten when compared to previous months. Sydney recorded a 0.3% increase in property prices while all other states fell by less than half a percent over the month, except for Hobart which fell by -1.4%. Perth housing prices remained resilient, down only slightly (-0.1%) over the month and up 2.4% annually (CoreLogic, 2023).
In the greater Perth region, there were 47,624 sales recorded during the 12 months to February 2023, which is 19% less than levels observed a year ago. It took a median of 16 days to sell during 12 months to February, which is two days faster than January and the same as 12 months prior (REIWA, 2023).
The graph below demonstrates the downward trend of stock availability within the Perth market and the continued quick speed at which properties are selling.
Source: REIWA and Momentum Wealth Research
REIWA Transactional market indicators to week ending 26 February 2023
Source: REIWA and Momentum Wealth Research
Perth’s median rental price increased while vacancy rates at record lows
Perth’s median rental house price increased to $550 per week in February 2023, a 17.0% increase on the year prior. There were 1,788 properties listed for rent on average in Perth during February 2023, which is down from 1,926 recorded in January 2023 and down from 2,310 at the same time last year (REIWA, 2023). The graph below shows the decline in the number of homes available for rent, bringing the Perth vacancy rate to record lows.
Source: REIWA and Momentum Wealth Research
This continued downward trend in the supply of rental properties within Perth has caused vacancies to remain at 0.7% in February 2023. It took a median of 14 days to lease during 12 months to February 2023, which is two days faster than levels seen a year ago (REIWA, 2023).
Inflationary pressures see RBA increase cash rate
Australia continues to feel inflationary pressures after the excess stimulus during the COVID-19 period and supply chain disruptions. Inflation rose 7.4% during the year to January 2023. This is lower than the 8.4% rise recorded during the 12 months to December 2022. Housing was one of the biggest contributors, rising 9.8% due to increases in new dwellings costs and rental prices.
This continued run of elevated inflation saw the RBA increase the cash rate for the 10th consecutive period to 3.60%. Lenders are forecasting the cash rate to settle around 3.85% to 4.10% as the RBA seeks to return inflation to their target range of between 2-3%. However recent global uncertainties in the banking sector have seen markets forecast that rates may have peaked.
Source: REIA