By Hayden Groves
It’s both tedious and familiar; media commentary about property market across the nation almost always forget about Western Australia. Representing about ten percent of the population, there’s some justification for it and our market does tend to behave differently to east coast markets.
However, headlines sell newspapers so when national mastheads run headlines shout ‘property prices to fall 20%,’ the good people of WA might assume it applies to our own local market.
The reality is that Perth’s property market is now one of the best performing markets in Australia. The pandemic-induced property boom that saw property values in places like Sydney, Brisbane and Hobart increase by more than 30 percent annually failed to materialise quite so spectacularly here. WA’s property values increased but at a more restrained rate.
This restraint has meant we’re now holding onto the gains made whilst east coast cities retreat. Core Logic’s latest monthly Home Value Index report reveals Perth’s house values dipped by 0.2 percent last month making it the best performing Capital city in Australia. By comparison, Sydney’s home values dropped 1.3 percent, Brisbane 2 percent, Hobart 1.1 percent.
When considered annually, Perth’s property values remain up 4 percent across the year whilst Sydney is down 6.9 percent and Melbourne is off 2.8 percent. Nationally, property values have nipped back 0.5 percent.
property market is heading for a soft landing
Once again, it is Perth’s relative affordability that will save us from further property value deterioration as population surges, our economy remains nation-leading and our jobs market tight despite recent interest rate rises. At a median home value of $559,043 compared to Sydney’s $1,036,727, we remain Australia’s most affordable capital city behind Darwin. It still makes little sense to me that Hobart’s – lovely as it is- median value at $696,334 is $137,291 higher than ours.
It's at the affordable end of the market across Perth that continues to perform well. Local government areas of Rockingham, Kwinana and Mandurah are all up 9.4, 9.1 and 8.2 percent respectively on an annual basis according to Core Logic data. Others in the top ten include Wanneroo, Armadale and Gosnells. Investors should look to these regions for some very affordable real estate that offer terrific yields in a tight rental market. Comparatively, only four of Sydney’s local government regions remain in positive house price growth territory, the most affordable of which is Fairfield at a median price of $928,100.
Supply of property for sale across WA remains low with 8,212 properties listed on www.reiwa.com, down from 8,864 a year ago. Nationally, listing stock is 18.2 percent below the five-year average whilst sales volumes begin to slow thanks to higher borrowing costs and faltering consumer confidence.
Our local property market is heading for a soft landing compared to our east coast cousins and while interest rate’s continuing rise has subdued our market, the prognosis for future up-side here after a more normalised market across 2023, is very promising indeed.
