Listings in Perth hit their highest level in three years in November, up 17.0% from November 2023, according to the Real Estate Institute of Western Australia (REIWA). But what impact will this have on the city’s market?
While increased listings may suggest an easing of market conditions, Perth’s market remains robust, with strong underlying demand continuing to drive activity.
Why are listings up?
- Seasonality
Traditionally, the spring and early summer months see higher property listings as sellers take advantage of better weather and buyer activity. November’s increase aligns with this seasonal trend, and while the numbers are higher than in recent years, they are not unprecedented.
- Capitalising on price growth
Perth’s dwelling values have soared over the last year, up 21.0% in the 12 months to November, according to CoreLogic. Homeowners may be keen to capitalise on rising property values. The opportunity to secure a solid return on investment is likely encouraging more sellers to list their homes, particularly as prices in some areas are reaching record highs.
- Pressure from prolonged high interest rates
On the other hand, high interest rates are putting financial pressure on some households, leading them to reassess their financial situations. For some sellers, listing their property has become a necessity in the face of high mortgage repayments.
Does this mean the market is turning?
Despite the increase in listings, it is unlikely that Perth’s property market is cooling or turning in a meaningful way.
- Strong demand
Perth’s economy remains resilient, buoyed by a strong job market and rising population growth. Western Australia continues to attract new residents. In the 12 months to June, the state saw growth of just over 58,000 people in net overseas migration and just over 9,000 in interstate migration, according to the Australian Bureau of Statistics. Together, this accounted for 83.3% of the state’s total population growth.
Buyers are also attracted to Perth’s relative affordability, with the Real Estate Institute of Australia’s latest affordability report finding WA remains the country’s most affordable state for homeowners.
- Ongoing housing shortage
While listings have increased, they remain lower than the historical average. This supply shortage has meant that demand continues to outstrip supply, sustaining upward pressure on prices and limiting the impact of higher listings.
Additionally, new homes are not being built quickly enough to keep up with demand, further exacerbating the pressure on existing dwellings.
- Tight rental market
Perth’s rental market remains exceptionally tight, with low vacancy rates (0.6% in November, according to SQM Research) and rising rents (up 9.2% year-on-year in November) driving many renters to consider buying. This is sustaining buyer demand.
- Election year
With both state and federal elections in 2025, some sellers may adopt a wait-and-see approach. “We know market activity often slows in the lead up to elections as buyers and sellers wait to see the outcome. This is especially so when housing is one of the key policy areas — as will be the case in both elections,” said REIWA CEO Cath Hart.
As a result, the growth in listings may slow as sellers wait until after the elections to decide whether or not to sell.
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