This article is from the Australian Property Journal archive
PERTH’S median house sale price could see a 20% surge by the end of 2024, after two quarters of healthy growth in the property market.
According to REIWA’s 2024 property market quarterly update, the December quarter saw 4.3% in median house price growth with the preliminary figures for March sitting at 4.2%.
“We can expect that to increase as more properties settle,” said Cath Hart, CEO at REIWA.
“The median house sale price has increased 13.6% over the 12 months to March, to a record $625,000, and if the market continues to grow as it has been, 20% growth is achievable between January and the end of 2024.”
Hart noted that current market conditions in the Western Australian capital are underpinning expectations for this ongoing growth.
“As well as price trends, we look at a range of figures when preparing our forecasts and the data suggests the significant imbalance between supply and demand will remain in 2024, maintaining the upward pressure on prices,” added Hart.
“We have very high demand, fuelled by extremely strong population growth and this is expected to continue – we are awaiting the Cook Government’s latest population forecast in the upcoming May State budget.”
Additionally, supply for new stock is still restrained, keeping focus on established housing.
“Building completions have been increasing, which is fantastic news, but we are still not building enough new homes to meet the demand from WA’s growing population,” said Hart.
“While completions are up, new home commencements have been declining. New home approvals have only just started to trend upwards. These figures suggest new home supply will remain below the State’s needs for some time.”
Western Australia’s economy also indicates ongoing price growth, with low unemployment boosting consumer confidence and borrowing capacity.
For units, median sale price was also up over the March quarter, with 3.4% growth to $425,000, up 6.3% from March 2023.
Units has seen more limited growth with a 2.8% spike for the December quarter and just 1.5% over 2023 as a whole.
With the median unit sale price still sitting below the record of $450,000 set in 2014.
“We have seen demand for units increase in the past few months,” said Hart.
“While many people prefer houses, they are selling quickly and prices are rising strongly, which is challenging for buyers. In general, units provide a more affordable entry point to the market for prospective buyers.”
“With demand for established homes remaining strong, we can expect unit prices to continue to increase in 2024, potentially exceeding the previous peak.”
In the rental market, Perth continues to set new records for itself, with the median dwelling rent at $650/week by the end of March.
This reflects an 8.3% increase from $600 at the end of December and 18.2% from the $550 recorded at the end of March 2023.
The median weekly house rent price hit a new record, up 4.8% over the quarter and 18.2% over the year to $650.
Likewise, in another new record the median unit rent price was up 5.3% from the end of December and 20.0% from the end of 2023 to $600 per week.
This growth was supported by limited choice available in the rental market, with less than 2,000 listings over the quarter and the vacancy rate hitting a new record of 0.4% at the end of March.
“The rental market is affected by the same conditions as the sales market: strong population growth and low supply which maintain upward pressure on rents,” added Hart.
“In what we hope becomes an ongoing trend, supply is getting a boost with some newly built homes owned by Eastern States investors finally coming to the rental market. This is predominantly in outer-lying suburbs where there has been land to develop.”
