Perth’s median house price is on course to grow by 25 percent through 2024, as outlined in REIWA’s latest quarterly market update.
The median price for units may see annual growth nearing 20 percent.
According to REIWA CEO Cath Hart, if the market maintains its current momentum, Perth’s median house price could hit $750,000 by year’s end, with unit prices possibly surpassing $500,000.
“Demand for property in Perth remains strong as both houses and units continue to sell quickly which has seen the continued growth in prices,” she said.
“Perth’s median house sale price at the end of September was $707,000, already 17.8 per cent higher than at the end of December 2023 and 29.7 per cent higher than the previous peak of $545,000 set in 2014.
“The median unit sale price is also at a record high, reaching $470,000 at the end of September. It is currently 14.1 per cent higher than at the end of 2023 and 4.4 per cent higher than the previous record of $450,000 set in 2014.”
Ms. Hart attributed the ongoing demand and price rise to strong population growth alongside challenges within the construction industry.
“Last week the ABS announced WA’s population is now over 3 million, which has been largely driven by overseas migration,” she said.
“This milestone highlights WA’s popularity as a desirable place to live, but the ongoing growth in population has also seen strong and sustained demand for housing.
“While new home build times are now recovering and being completed in quicker timeframes, Perth’s overall housing completions are still low, which is maintaining the strong demand for established homes and the continued upward pressure on prices.”
Ms. Hart noted that only a notable shift in current conditions would likely slow the price growth in Perth’s property market, though a few factors could affect the pace.
“Factors that might impact the current price trend for Perth dwellings over the coming months and into the first half of 2025 include the upcoming elections, both federally and in WA, as well as potential changes to interest rates.
“We know market activity often slows in the lead up to elections as buyers and sellers wait to see the outcome. This is especially so when housing is one of the key policy areas — as will be the case in both the upcoming federal and WA elections.
“We have a state election in early March and the federal election has to be held before May. This is likely to have some effect on market sentiment and activity.
“The ongoing debate about if, or when, the Reserve Bank will cut rates may also lead to hesitation from some buyers who may be waiting for rates to fall before entering the market.
“We will continue to watch the data and the on-the-ground trends and update our forecast accordingly.”
Perth’s median rental prices for dwellings and houses held steady over the September quarter, while the median rent for units rose.
By the end of September, the median weekly rent for Perth dwellings was $650, remaining consistent with June figures but marking an 8.3 percent increase from December 2023.
The median rent for houses also stayed at $650 per week, unchanged since March and up 4.8 percent from December last year.
Units saw a median rent increase to $640 per week, 6.7 percent higher than in June and a 12.3 percent rise since December 2023.
Ms. Hart noted that, even with the uptick in unit rents, pressures within Perth’s rental market have begun to ease.
“New supply is coming to the market, which has seen the vacancy rate increase from a record low of 0.4 per cent in March to 1.6 per cent at the end of September,” she said.
“The market has also reached an affordability ceiling so while there could still be growth in median rent prices over the remainder of 2024, it is likely to be small.”
Ms. Hart highlighted that regional median house sale price growth is anticipated to differ across various areas.
“Bunbury and Busselton are projected to achieve annual growth rates close to 25 percent, while Albany, Broome, Esperance, Geraldton, and Kalgoorlie may see increases of around 10 to 15 percent,” she noted.
In contrast, Karratha and Port Hedland might experience more modest growth, estimated at up to 5 percent.
Regarding rental price trends, Ms. Hart added:
“Rents in Karratha have held steady, and Port Hedland and Broome have seen declines, suggesting that these markets might remain stable or face further reductions.”
Meanwhile, other regional centers are expected to experience rent increases through the end of 2024.
The REIWA regional report for the September quarter is scheduled for release in late November.
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