Perth Residential Property Market Insights – May 2023


Perth property values return to record highs

Residential property values rose 1.2% across Australia during May 2023, marking the highest monthly growth since November 2021 (CoreLogic, 2023).

All capital cities recorded growth, with Sydney (1.8%), Brisbane (1.4%) and Perth (1.3%) recording the strongest monthly rises. Perth dwelling values rose by 2.4% over the past quarter and 2.0% annually. Perth and Adelaide remain the only two capital cities to show growth year-on-year, with Perth being the only capital city where dwelling values have returned to record highs (CoreLogic, 2023).

The strong demand for properties in Perth continued, with a median time of just 12 days to sell during May 2023, which is the fastest time on record since 1998 when data was first collated (REIWA, 2023).

 Declining housing supply continues

Although there were a reasonable number of properties entering the market, the speed at which they are selling is keeping the available properties for sale at low levels, decreasing to just 5,885 properties in Perth at the end of May. This represents an 8.8% decline from April and 29.3% decrease compared to the same time last year. The current levels of supply were last at this level in mid-2010. (REIWA, 2023).

The graph below demonstrates the downward trend of stock availability within the Perth market.

Source: REWIA and Momentum Wealth Research

Persistent decline in rental property supply

In May, the downward trend of rental property supply continued, with 1,969 properties available for rent and a vacancy rate of 0.7%. The median rental house price remained unchanged at $550 per week.

The median time to lease a property in April 2023 was 15 days, indicating a one-day improvement from April but one day longer compared to three months ago.

REIWA Transactional market indicators – May 2023

Source: REWIA and Momentum Wealth Research

Perth’s housing affordability remains resilient despite cash rate

According to recent data from the Real Estate Institute of Australia, housing affordability declined in the March 2023 quarter following the Reserve Bank of Australia’s efforts to control inflation by increasing the cash rate.

WA saw an increase in the average family’s mortgage repayment contribution to 34.5% of their income; however, it remains the most affordable state or territory in the country other than NT. In contrast, NSW maintained its status as the least affordable state, with residents spending 55.0% of their family income on mortgage repayments.

Despite rising mortgage rates, house prices across the country, particularly in Perth (over 2%) and Sydney (over 4%), continued to rise. The shortage of housing in WA, coupled with projected population growth, is expected to sustain demand in affordable housing areas despite ongoing interest rate increases.

Source: REIA