If you’ve followed property headlines over the past few weeks, you’d be forgiven for thinking Perth’s strong property market has finally run out of steam.
Media coverage has increasingly focused on the market’s changing momentum. Reports have highlighted suburbs recording price declines, fewer buyers attending home opens, reduced competition and signs that Perth’s significant growth cycle may be ending.
Recent figures showed house price growth slowing to 1 per cent for the June quarter, the weakest quarterly result in more than a year, prompting some commentators to declare that the market has turned.
The headlines aren’t entirely wrong. The market has changed, but what they often fail to acknowledge is that a slowing market and a declining market are two very different things.
Despite the commentary, Perth remains one of the strongest-performing capital city markets in Australia. House prices are still sitting well above where they were a year ago, and many of the structural drivers that underpinned the city’s growth remain firmly in place.
The conversation around Perth’s property market often overlooks a key driver – that there has never been one single Perth market. There are hundreds of them.
That distinction matters more now than it has at any point during the past four years.
During the height of the market, investors didn’t need to be particularly selective. Population growth, limited housing supply, record-low vacancy rates and strong buyer demand created a rising tide that lifted much of the market. Whether you were buying in an affordable outer suburb, a middle-ring family area or an established lifestyle location, there was a good chance your property benefited from the broader upswing.
As growth moderates, buyers can no longer rely on the market doing all the heavy lifting. Success increasingly comes down to identifying the locations and assets that have the strongest fundamentals and the best long-term prospects.
That’s not necessarily bad news. In many ways, a more balanced environment creates better opportunities for well-informed buyers.
When markets become less frantic, homebuyers and investors gain the ability to be patient. They have time to assess competing properties, conduct thorough due diligence and negotiate more effectively. Sellers become more realistic, and opportunities that would have been fiercely contested 18 months ago can suddenly become accessible.
So, what should buyers be looking for now?
Rather than chasing the suburbs that have already delivered significant growth, buyers should be looking for markets where demand remains strong but future supply is constrained. Scarcity has always been one of the most powerful drivers of long-term property performance, particularly in periods where overall market growth slows.
Established suburbs close to employment centres, tightly held lifestyle locations, premium school catchments and areas with significant barriers to new supply will continue to perform well.
One of the most consistent trends throughout property cycles is the migration of buyer demand into neighbouring suburbs as prices rise. When buyers become priced out of one location, they naturally begin looking elsewhere for similar amenities, transport links and lifestyle benefits at a more affordable entry point.
That process creates opportunities in markets that may have been overlooked during the early stages of a growth cycle.
Investors should also place greater emphasis on assets that offer the ability to create value. During strong growth periods, many properties appreciate simply because the market is moving quickly. In more measured conditions, opportunities to renovate, subdivide, improve or reposition an asset can become far more valuable.
The best investments are often those that provide multiple pathways to growth rather than relying solely on rising market prices.
Above all, the key question every buyer should ask is simple: “why will people want to live here in 10 years’ time”?
We also can’t assume that Perth’s next chapter will look exactly like its last.
The period of broad-based double-digit growth that characterised much of the past four years may well be behind us. The data suggests the market’s pace has moderated and buyer behaviour has changed but a slower market is not the same as a weak market, and it certainly isn’t the same as a market devoid of opportunity.
Those looking for a single headline to tell them what Perth’s property market is doing may find the coming years increasingly confusing. Some suburbs will underperform. Others will continue to grow. Different price points, property types and locations will experience different outcomes at different times.
That’s because Perth has never been one market.
