This article is from the Australian Property Journal archive
OVER the 2022-23 financial year, the Perth property market dodged the housing downturn and set new records for the time it takes to sell a property, despite soaring interest rates.
REIWA attributed the market’s resilience to the state’s strong economy, low unemployment rate, lower than average mortgages and higher than average wages.
“Resilience was the key theme for the WA property market in 2022-23 with Perth emerging as the only capital city to record moderate price growth over the financial year despite constant interest rate rises,” said Cath Hart, CEO at REIWA.
“While the rate rises have certainly impacted household spending, many people have been able to adjust to the increase in their repayments.”
“Currently, we’re not seeing an increase in mortgagee sales advertised on www.reiwa.com and we’re advised banks are working with their customers to help prevent them experiencing hardship.”
The house market outperformed the unit market, with median house prices up 4.6% to a new high of $555,000 over the financial year.
At the same time, the median unit price was down 3.2% to $399,000 over the same period.
“Six of the suburbs in this year’s Top 10 were under the median house price whereas last year none were under the median house price and nine were priced over $1 million,” said Hart.
“All the suburbs on last year’s list recorded growth of more than 26 per cent, while this year none saw that level of growth and only three recorded growth over 20 per cent.”
Winthrop recorded the most price growth for houses, with its median increasing 25.3% to $1.25 million.
With Middle Swan following with 21.6% growth to $413,500, Bullsbrook up 20.1% to $462,500, Lathlain up 19.4% to $940,000 and Parmelia rounding out the top five, up 19.25% to $375,500.
While joining Winthrop, Trigg and South Perth both exceeded the million-dollar mark at $1,770,000 and $1,790,000 respectively.
“The WA market has seen moderate growth overall and very strong growth in some suburbs, however the rate of growth has slowed over the past 12 months,” added Hart.
“It’s not a concern, as steady growth is preferable to significant jumps in prices.”
In the unit market, nearly half the suburbs in the top 10 for unit growth were below the median price, while the top performer was Bibra Lake having increased by 32.6% to $315,000.
Booragoon increased by 31.0% to $687,500, Erskine up 24.2% to $385,000, Mount Pleasant up 20.5% to $735,000 and Crawley up 16.5% to $670,000.
“Affordability was also a focus for buyers in 2022-23 with the end-of-year data revealing that all of the Top 10 fastest selling suburbs were well below the Perth median house price,” said Hart.
“It’s a big change from last year’s Top 10, where all the suburbs were over the Perth median house price at that time – the rise in interest rates has cleared played a role in this trend.
In terms of the fastest selling suburbs, Leda topped the list for houses with a median of five selling days, with Baldivis topping the unit list at 12 selling days.
“While buyers have acted swiftly when they found a suitable house, they were also being prudent,” added Hart.
“They’ve seen their borrowing capacity reduced significantly in the past year, so this outcome signals they’re factoring in the possibility of more rate rises and are spending wisely.”
Meanwhile in the rental market, demand was still high and supply remained low, pushing rents to new highs across the state.
The median rent for June was up to $580 per week for houses and $530 per week for units, with the vacancy rate reaching a 42-year low of 0.6% in December and has sat 0.7% for nine of the past 12 months.
“Given ongoing stock shortages and sustained demand from new interstate and overseas arrivals, we expect these trends to continue into the first half of the 2023-24 financial year,” said Hart.
“Real estate agents, builders and developers are reporting increasing interest from Eastern States investors so in the medium term we expect to see a moderate increase in supply and an easing in the vacancy rate.”
For houses, Medina was the top suburb for rental yield, with a median sale price of $330,000 and a median weekly rent price of $400, reflecting a yield of 6.3%.
While for units, Bayswater was the top performer, with a median sale price of $243,000 and a median weekly rent price of $470, for a yield of 9.6%.
