Perth Values Up - Rents Rise

by Hayden Groves

Each week, my friend from data house Core Logic sends me a snapshot of residential property market behaviours across Australia. The emerging trend since the rapid rise of interest rates demonstrates that Perth is the most likely place in the nation to hold onto its price gains experienced since the start of 2020.

As the weeks tick by, big east coast cities of Brisbane, Sydney and Melbourne continue to retreat down 0.9, 2.0 and 1.4 percent respectively over the past month. Adelaide rose 0.4 percent last month and Perth crept up 0.1 percent. The year-to-date and 12 month change figures are the ones to look to for longer term trends and its these numbers that support Perth’s relative market stability. 

This measure shows Perth rising 4.2 percent year-to-date and 5.2 percent in the past 12 months. All other capitals are retreating at a faster rate than Perth. Sydney’s 12-month growth rate is now at 0.8 percent and Melbourne has gone negative to -0.2 percent.

Sales volumes remain strong in Perth too with around 900 weekly sales, unchanged from a year ago. Meanwhile, local listing stock remains tight with 13.2 percent fewer properties listed today than a year ago with fewer new listings coming to market. Elsewhere across Australia, overall listing stock has grown, most notably in Hobart where there’s now 59.7 percent more listings than last year. All other capitals aside from Perth and Canberra have more new listings coming to market than this time last year. East coast markets are now beyond their peak as supply begins to catch up with demand.

Rental markets across the nation tell a different story. Everywhere, rental stock is falling; most notably in Brisbane, Melbourne and Adelaide where total listing numbers have fallen by 29.1 percent, 26.6 percent and 22.4 percent respectively. Perth’s rental stock has fallen 15.8 percent in a year, a serious warning to government looking to further disincentivise investment by considering changes to residential tenancy laws.

No surprise that rents continue to rise across the nation, up 9.8 percent in a year. Vacancy rates are low everywhere at 1.2 percent nationally, down from 2.1 percent a year earlier. Perth’s vacancy rate has fallen from 1.4 percent to 0.8 percent in twelve months.

The relative stability of the Perth property market is the main take-out from these numbers. Our affordability, enviable lifestyle, strong economy and low unemployment rates make for ideal conditions for continued property investment. To borrow from share trading parlance, the numbers make Perth a “strong hold, firm buy” market.