Perth’s house prices could continue to set new records if growth remains at its current rate, REA Group’s PropTrack has found.
PropTrack’s May home value index calculated Perth’s median home value at $571,000, up 0.64 from the previous month.
Meanwhile, CoreLogic’s index reported Perth’s median home value as exceeding $580,000.
Perth has repeatedly bucked the national trend of falling house prices, with 2 per cent growth in home values compared with a 6.8 per cent decline nationally, during the 12 months to May 31, CoreLogic shows.
PropTrack recorded Perth’s home value growth as rising 4.8 per cent in 2022 already up 4.21 per cent this year, to sit at a new peak.
PropTrack’s recent market insight report stated that nationally, home values could return to positive annual growth by July if they stayed on the current trajectory.
“After five months of price growth, stronger market conditions are becoming more widespread in 2023,” the report read.
“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets.
“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises.”
The report went onto say that if the rate of price growth over the last quarter continued, national property prices will surpass their prior peak by January next year.
“However, there are factors that may weigh on the pace of price rises ahead,” the report read.
“Price growth may wane if stronger market conditions improve seller confidence and spark a boost in stock coming to market.
“Interest rates also rose again in June and may rise further, which could slow the recovery.”
National median home values are at about $715,00.
Listings plunge
Meanwhile, recent Real Estate Institute of Western Australia data shows that the number of home listings in Perth has fallen to its lowest level since 2010.
The amount of properties available for sale in Perth fell to 5,885 at the end of May, an 8.8 per cent decrease on April and 29.3 per cent decrease on 12 months ago.
“Despite 11 interest rate rises, demand hasn’t slowed,” REIWA CEO Cath Hart said.
“Homes are selling in a median of 12 days. This is the fastest median time on market since we started keeping these records in 1998 and has only been recorded once before – in March 2021.
“And despite another rate rise, we expect demand to remain strong”
Ms Hart added that the economic conditions in WA meant established homes were expected to remain in demand.
“WA’s population is growing, and people are choosing to buy established homes rather than tackle the rental market,” she said.
“Increasing costs and ongoing delays in the building industry are also seeing people buy rather than build.”