Perth’s property market continues to defy expectations, with record-high values doing little to deter buyers.
While the rest of the country grapples with varying market conditions, Perth’s home values have consistently outpaced the national average. In July, CoreLogic data showed prices in Perth had risen 24.7% year-on-year, compared to 7.6% nationally.
There are several interesting factors in the Perth property market demonstrating this growth.
Houses versus units
Demand for property has put upward pressure on prices for both houses and units over the 12 months to July, according to SQM Research. In fact, there is little difference between the growth of the two types of property:
- House prices increased 23.7%
- Unit prices increased 22.3%
Where the difference is more pronounced, is in the longer-term averages. Here, houses have outperformed units, seeing growth of 3.2% on average over the last ten years compared to 1.9% for units.
Investors positive about WA
Despite higher interest rates over the last two years, investor lending in Western Australia has grown considerably. The latest lending indicators from the Australian Bureau of Statistics showed that new home loan commitments by investors in WA were up 27.2% between June 2023 and June 2024.
Comparatively, only the ACT saw more growth in new loan commitments over the 12 months to June 2024.
Likewise, the value of these new home loan commitments also surged in WA, up 56.6% year-on-year.
This growth in investor activity in WA suggests that property investors are optimistic about Perth’s long-term prospects.
Owner-occupiers grow in numbers
Owner-occupiers have also remained active buyers in the Perth market, with ABS data showing a steady rise in owner-occupier lending. Between June 2023 and June 2024, the number of new loan commitments for owner-occupiers in WA grew 2.7%.
This shows that, despite prices rising, many buyers are still choosing Perth. The city’s strong economy and population growth are encouraging factors driving this growth as well.
Where to next?
This dominance of the Perth property market is expected to continue. Domain’s forecast for the 2024-25 financial year predicts growth of between 8 and 10% for houses and 4 and 5% for units.
Perth house prices will be at a new record high of between $840,000 and $856,000 by the end of the next financial year if this prediction comes to pass. Unit prices will also reach new records of between $443,000 and $447,000.
While this is a slowdown from current increases, Perth will remain one of the strongest markets in the next financial year.
By comparison, Domain’s forecast sees national prices rising only 3 to 6% for houses and 2 to 4% for units.
While the combination of higher interest rates and record-breaking property values might be expected to dampen buyer enthusiasm, Perth’s market is demonstrating remarkable resilience. The city’s strong economy, coupled with encouraging interest from investors continues to put upward pressure on prices.
Interested in buying a property in Perth? As an expert Perth buyer’s agent, Resolve Property Solutions can help. To discuss your options, book a free discovery call with a Resolve Buyers Agent.
