With the new year well and truly underway, our team takes a look at the Perth property market’s performance in January. Despite other states recording declines, the Perth sales market remained resilient during the month. The demand for housing continues to outweigh supply and the pressure on rental prices continued.
Perth sales market remains resilient
Residential property values declined across Australian capital cities during January 2023, with Hobart and Brisbane recording the greatest falls of -1.7% and -1.4% respectively.
Darwin and Perth were the most resilient, only falling by -0.1% and -0.3% respectively. Perth housing values were down slightly (-0.1%) over the three months ending January 2023 and up 2.7% annually (CoreLogic, 2023).
Demand continues to outweigh supply
Continued construction cost escalations and labour shortages have caused the supply of newly constructed dwellings to be unable to meet the demand from purchasers. There were only 7,174 properties listed for sale during the week ending 29 January 2023, which is down from 7,794 four weeks prior and down from 8,143 in the same week 12 months prior.
There were 47,829 sales recorded during the 12 months to January 2023, which is 19% less than levels observed a year ago. It took a median of 17 days to sell during the 12 months to January, which is one day slower than December (REIWA, 2023).
The graph below demonstrates the downward trend of stock availability within the Perth market.
Source: REIWA and Momentum Wealth Research
REIWA Transactional market indicators to week ending 29 January 2023
Source: REIWA and Momentum Wealth Research
Perth’s median rental house price increased
Perth’s median rental house price increased to $545 per week in January 2023, which is 18.5% more than the year prior. There were only 1,851 properties listed for rent in Perth during the week ending 29 January 2023, which is up from 1,450 recorded four weeks prior and down from 2,305 recorded 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 fall to 0.6% in December 2022, which is the lowest level in over 40 years. It took a median of 14 days to lease during 12 months to January, which is the same as December 2022 and two days faster than levels seen a year ago (REIWA, 2023).
Perth’s population growth
Western Australia’s population has continued its growth trajectory during the June 2022 quarter, recording an annual increase of 1.3%. This growth was largely attributed to an increase in overseas and interstate migration following the reopening of the Western Australian borders in March 2022. This growth trend is expected to continue in the following quarters as interstate and international travel into WA became more accessible during the second half of 2022.
Source: REIWA and Momentum Wealth Research