Outer Suburbs Lead Perth’s Housing Growth
Outer Suburbs Lead Perth’s Housing Growth, Surpassing Inner-City Markets
Data from Cotality (formerly CoreLogic) shows that the lower end of the housing market has seen the most growth over the past year. This reflects strong demand for more affordable homes, as buyers continue to deal with borrowing limits and high housing costs.
Perth’s most affordable homes saw the biggest price jumps over the past year, with lower quartile home values rising 15.4% – double the 7.7% growth seen in the upper quartile.
Out of the top 20 fastest-growing suburbs, three-quarters were more than 15 kilometres from the Perth GPO, and only one was within 10 kilometres. Most of these high-growth areas were in the City of Swan (seven suburbs) and the Shire of Mundaring (four suburbs).
Research director Tim Lawless said strong price growth has been focused on Perth’s outer areas, where homes are still just within reach for many buyers despite wider economic challenges.
“Households are making pragmatic decisions in response to tighter borrowing capacity and higher mortgage costs,” he said.
“That’s pushed demand towards the lower quartile of the market, and it’s across the outer suburbs that this value-driven demand is translating into the strongest growth.”
Lawless said the latest data underscores a structural shift in buyer behaviour driven by the fact that the median income no longer buys the median home.
“In theory, a household on a median income, with a 20 per cent deposit, would need to dedicate just over half of their gross income to afford a median-priced home,” he said.
“In practice, that’s pushing buyers further out, where homes remain comparatively affordable.
“The result is that we’re seeing outer suburban markets do much of the heavy lifting in terms of price growth.”
REIWA President Suzanne Brown said most Perth suburbs are still seeing their median house prices go up. However, some areas have stayed steady in recent months, and a few are now starting to show small drops.
“We are occasionally hearing reports from members about properties being sold for less than the asking price, but this depends on a number of factors such as location, presentation, realistic initial pricing and local levels of competition and buyer interest,” she said.
In April, suburbs like Rockingham, Quinns Rocks, Falcon, Woodvale, and Girrawheen were standout performers, each seeing house prices rise by 1.5% or more for the month.
Tim Lawless noted that the strong growth in outer suburbs has important impacts on infrastructure, transport, and planning, as these areas face fast population growth driven by rising housing demand.