Full house as WA population surges

Strong population growth is maintaining pressure on WA’s established homes market according to REIWA CEO Cath Hart.

“Over 73,000 people moved to WA in the year to June according to the latest data from the Australian Bureau of Statistics,” Ms Hart said.

“If you assume there are 2.5 people per household, that’s an additional 30,000 households in that time.

“However, we are building about 14,000 new homes per year so we have a significant shortfall in supply versus demand.

“Earlier this year the National Housing Finance and Investment Corporation stated WA faced a shortfall of 25,200 new properties from 2023 to 2027.

“At current building completion and population growth rates this is very likely to increase.”

Ms Hart said such strong migration was putting upward pressure on property and rent prices.

“Migrants generally look to the established homes market to either buy or rent when they first move to WA,” she said.

“30,000 new households combined with local demand has seen house prices rise – up 8.2 per cent in the past 12 months and houses sell in a median of eight days.

“You can also see the toll on the rental market where the median rent has risen 20 per cent in the past year. And while the vacancy rate remained stable at 0.7 per cent for November, this is a near record low and well below the 2.5 – 3.5 per cent you see in a balanced market.

“For some perspective, the vacancy rate has been below 1 per cent since August 2022 and the last time we saw a vacancy rate above 2 per cent was May 2020.

“What we need is a consistent pipeline of new housing. There is definitely the demand for it, but a number of issues are slowing completions, from capacity in the building industry to infrastructure costs and supply, and even connection to the electricity system.

“In addition, while building approvals have risen slightly, they are still very low and this is a concern for the longer term.”