Story by Eleanor Creagh, Senior Economist with my comments added

Senior Economist

Updated 2 Nov 2023, 9:29am

First published 2 Nov 2023, 6:00am

It is great to see and hear results like this We have been helping clients to create wealth in the Perth market for a number of years now as part of our Property Advisory Process.

Perth is the most competitive housing market in the country right now and whether you’re buying or renting there’s a shortage of stock on the market. 

With home prices up 10.90% over the past year, Perth is Australia’s top performing capital city market when it comes to price growth.

That’s more than five times the historic average pace of annual growth experienced in Perth, bringing prices to a record high.

If growth continues at the same pace as over the past quarter, prices in Perth would be set to end the year up 12%.

Perth’s rental market is also challenged. Although the greatest increases in advertised rents over the past year have been seen in Sydney (+18.2% year-on-year), closely followed by regional WA (+16.7% year-on-year) and Perth (+14.9% year-on-year).

The critical lack of available rentals is causing rental prices to increase at a rapid pace.

Buyers and renters competing for fewer homes

Total for-sale listings are currently at historic lows in Perth (on records back to 2004) and total rental listings are also at historic lows.

Source of Chart: realestate.com.au

At the same time, the pipeline of new supply remains constrained.

As a result, growth in the supply of new housing is limited at a time when there is already a shortage.

The number of enquiries per rental listing are the highest in Perth (50.3) of any market, illustrating the severe imbalance between rental demand with rental properties in short supply.

To put this into perspective, nationally, the number of enquiries per for sale listing increased 14.1% year-on-year in September but remains below the record high levels seen in late 2021.

In contrast, enquiries per for sale listing in Perth have jumped by 93.9% year-on-year and are sitting at a record high level.

Source of Chart: realestate.com.au

Fewer new listings and faster selling times have driven total for sale listings lower, and there were 25.7% fewer homes listed for sale in Perth in September of this year compared to last.

This strong competition is likely one reason why Perth has overtaken Adelaide as the strongest performing capital city market for price growth over the past year, as buyers compete for limited options.

Limited supply amid strong buyer demand has resulted in a sellers’ market, with prices in Perth outpacing all the other capitals.

Prices in Perth were unaffected by last year’s rate rises, and while prices fell in most markets, Perth avoided the downturn. That stronger growth has continued into this year.

The attraction of Perth

One reason Perth is one of the hottest markets in the country is its relative affordability.

Despite recent gains, Perth housing values remain affordable compared to other capital cities after a decade of underperformance relative to east coast capitals. Darwin is the only capital with a lower median dwelling value.

The PropTrack Housing Affordability Index shows that housing affordability is highest in Western Australia, a factor likely to attract both local, international, and interstate buyers.

Talk to us about how we can help you with creating long term wealth with property investing.

We have done quite a bit of work with clients into the Perth market. Our National Acquisitions Director and our Research Team have been looking at Perth and WA over the last 6 odd years.