Perth’s property values continue to outpace nation
Residential property values across Australia increased by 0.5% in July 2024, with Perth leading the nation in price growth for the tenth consecutive month, rising by 2.0%. Adelaide and Brisbane followed with gains of 1.8% and 1.1% respectively. In contrast, Hobart experienced a 0.5% decline, while Melbourne and Darwin recorded contractions of 0.4% and 0.2% respectively. (Core Logic, 2024)
Over the past quarter, dwelling prices in Perth have increased by 6.2%, and 24.7% over the past year, solidifying its position as the nation’s top-performing property market (Core Logic, 2024).
Property market tightens as listings decrease
During the week ending 4 August 2024, only 3,266 properties were listed for sale on the Perth market, a decrease from the 3,144 listings recorded four weeks prior and from the 5,257 in the same week last year (REIWA, 2024).
The average time to sell a house in Perth rose slightly to 9 days in July 2024, compared to 8 days in the previous month. However, units sold slightly faster, with an average time of 9 days, a two-day improvement over June. (REIWA, 2024)
The graph below demonstrates the downward trend of stock availability within the Perth market to the week ending 4 August 2024.
Source: REIWA and Momentum Wealth Research
Perth’s rental market shows signs of easing
Perth’s median rental dwelling price remained stable at $650 per week in July 2024, although this still represents a significant 18.2% increase compared to the same time last year. While the median rental price for houses held steady at $650 per week, units saw a slight rise to $620 per week. (REIWA, 2024)
There was a slight decrease in rental stock coming onto the Perth market in July, with 2,518 properties listed for rent during the week ending 4 August 2024. This was a decrease from the 2,597 recorded four weeks prior but an increase compared to the 1,877 listings recorded at the same time last year. (REIWA, 2024)
The graph below shows the recent uplift in the number of homes available for rent in the Perth market to the week ending 4 August 2024.
Source: REIWA and Momentum Wealth Research
Western Australia’s supply deficit impacts prices
The net supply of dwellings is used to identify how the supply and demand of housing influence residential house prices within the Perth market. This metric is calculated by deducting the estimated quarterly demand for dwellings by the number of dwellings added onto the market, less demolitions.
To estimate demand, Western Australia’s quarterly population growth is used. With ABS data since 2005 indicating an average household within Western Australia is occupied by between 2.55 to 2.62 people, we can divide the quarterly population increase by the quarterly household size to estimate the net increase in demand for dwellings.
The December 2023 quarter saw Western Australia recording the strongest annual growth nationally at 3.3%, equating to a population increase of 19,598 people and an estimated net demand rise of approximately 7,685 dwellings. However, only 4,373 dwellings were completed during this period, while 346 dwellings were approved for demolition. This resulted in a net housing supply deficit of around 3,658 dwellings for the December 2023 quarter. (ABS, 2024)
Historically, periods of supply exceeding demand, such as between 2013 and 2018, have coincided with the Perth residential market’s peak, followed by a consolidation phase. In contrast, supply shortages typically drive price increases. Given the current growing supply deficit in Western Australia, it is anticipated that Perth property prices will continue to rise.
Source: REIA