Property spotlight on Victoria Park. Pictured - housing street view
UPDATE: Perth’s property market has just outperformed the rest of Australia, with house prices soaring 1.9% in October, the fastest monthly gain since June 2023, according to new data from real estate research firm Cotality. This surge comes on the heels of successive interest rate cuts, indicating a strong demand for housing amidst a significant supply shortage.
Latest figures reveal that home values in Perth have jumped 9.4% over the past year, far exceeding the national average of 5.6%. The median house price in the metro area now stands at $884,471. In stark contrast, the capital cities combined have seen only modest growth, highlighting Perth’s unique market dynamics.
Tim Lawless, Cotality’s research director, stated, “The first rate cut in February marked a clear turning point, with home values moving through a positive inflection across most regions and gathering steam since then.” However, the sharp price increases reflect a troubling trend: advertised supply is currently 18% below average, exacerbating the competitive landscape for buyers.
Among the fastest growing suburbs in Perth, Belmont-Victoria Park leads with an impressive 13.6% increase in median value, now reaching $873,405. Following closely is Kwinana, up 12.3% to $700,392, and Armadale with an 11.5% rise to $778,035. Notably, Albany in WA’s Great Southern region has experienced a staggering 22.2% growth, pushing its median value to just under $700,000.
The surge in demand is further fueled by the newly expanded 5% deposit guarantee scheme for first home buyers, which commenced on October 1. “Indeed, it is the broad middle and lower quartile of the market where gains are strongest,” Cotality noted, emphasizing the scheme’s impact on housing demand.
Looking ahead, the imbalance between demand and supply is expected to persist. Cotality warns that dwelling commencements and completions are well below the decade average, which could lead to ongoing price pressures. Furthermore, Reserve Bank of Australia data indicates that housing credit for investors is rising at its fastest pace since June 2015. Should this trend continue, tighter lending policies may follow, potentially curbing investor demand, which currently constitutes 38% of mortgage activity.
As banking economists adjust their forecasts, the Commonwealth Bank has suggested that no further rate cuts will occur in this cycle, reshaping the outlook for potential homebuyers and investors alike.
With the Perth property market showing no signs of slowing down, these developments highlight a unique opportunity for buyers and investors in a landscape characterized by rapid growth and fierce competition. Keep an eye on these emerging trends as the situation evolves.
