Perth records nation’s highest property value increase
During January 2024, residential property values across Australia rose by a modest 0.4% while Perth recorded the most significant increase of 1.6%, followed by Adelaide (1.1%) and Brisbane (1.0%). The Perth property market continues to stand out with dwelling values climbing 4.9% over the past quarter and 16.7% over the past year, marking the strongest annual growth rate in the nation. (CoreLogic, 2024)
The high demand for properties in Perth continued throughout January, with a median time of 9 days to sell, which is one day faster than December 2023 and 15 days faster than the year prior (REIWA, 2024).
Housing supply remains at historically low levels
According to REIWA, there were only 3,860 properties listed for sale during the week ending 28 January 2024. This number of listings is higher than the 3,648 recorded four weeks prior but lower than the 7,137 in the same week last year. (REIWA, 2024)
The graph below demonstrates the downward trend of stock availability within the Perth market.
Source: REIWA and Momentum Wealth Research
Rental price increases continue
Perth’s median rental dwelling price rose to $615 per week in January 2024, marking an 18.3% increase compared to 12 months prior. The median rental price for houses rose to $640 per week during January 2024, while the rate for units reached $580 per week. (REIWA, 2024)
According to REIWA, the rental vacancy rate remained unchanged at 0.7%, significantly lower than the 2.5% to 3.5% range expected for a balanced market.
In January 2024, the median time taken to lease a property was 16 days, one day slower than in December and 12 months prior. (REIWA, 2024)
Source: REIWA and Momentum Wealth Research
The impact of dwelling supply on Perth’s housing prices
The net supply of dwellings identifies how the supply and demand of housing influences residential house prices within the Perth market. It’s calculated by deducting the estimated quarterly demand for dwellings by the number of dwellings added onto the market, less demolitions. Demand estimates are based on Western Australia’s quarterly population growth and the average household size, reported by the ABS to range from 2.55 to 2.62 people since 2005.
The June 2023 quarterly population data highlighted Western Australia as having the highest annual population growth nationally at 3.1%, translating to a net demand for approximately 7,735 dwellings from a population increase of 19,724. However, with only 3,839 dwellings completed and 327 demolished in the same quarter, Western Australia faced a net supply shortfall of 4,223 dwellings. (ABS, 2024)
This supply deficit, coupled with near-record low dwelling approvals, suggests Perth’s property prices are likely to continue rising, echoing trends where supply shortages have historically led to price increases.
Source: ABS and Momentum Wealth Research