Perth property market holds steady in the face of interest rate rises

CoreLogic’s Perth home value index remained stable in November.

Brisbane and Hobart recorded the largest decline (2 per cent), while Darwin was the only capital to record an increase (0.2 per cent).   

REIWA CEO Cath Hart said the Perth index has hardly changed since May when interest rates started rising. 

“The increases have added $760 per month to a $500,000 mortgage since May, while those on a mortgage of $1 million have seen repayments increase $1,520 per month,” she said. 

“Rising interest rates have clearly impacted prices and borrowing capacity in the Eastern States. 

“Perth, on the other hand is very well-placed to weather the changes in interest rates. 

“The Western Australian economy and finances are among the strongest in the world. The population continues to grow and WA has one of the lowest unemployment rates in the country.  At a recent RBA meeting they noted there were currently more ads for jobs in WA than active candidates. 

“Meanwhile, Perth is the most affordable capital city in Australia. 

“These factors are all supporting the property market and there is nothing right now indicating that house prices will fall drastically any time soon.”   

The top performing suburbs for house price growth in November were Bentley (up 3.1 per cent to $500,000), Subiaco (up 2.1 per cent to $1,675,000), Bayswater (up 2.1 per cent to $720,000), Dawesville (up 2.0 per cent to $520,000) and Falcon (up 1.9 per cent to $453,500).   

The other suburbs to record strong house price growth were Sorrento, Parmelia, Kelmscott, Heathridge and Tapping.  

Listings for sale  

There were 8,642 properties for sale on reiwa.com at the end of November. This is an increase of 5.8 per cent on the 8,169 reported last month, but 5.1 per cent lower than levels seen a year ago. 

“The delays in the building industry coupled with some hesitancy, are affecting the number of properties for sale,” Ms Hart said. 

“People who are building new homes are reluctant to list their current home before their new home is complete.  People looking to buy an established home are also waiting to sell until they have found a new home. This reduces the number of properties for sale.   

“Building completions are expected to improve over the next 18 months and when they do the low supply of established housing will start to improve.” 

Time on market  

The median time to sell a house was 15 days during November, unchanged from October and three days faster than three months ago.   

reiwa.com data revealed the fastest-selling suburbs in November were East Cannington (four days); Meadow Springs (five days); Orelia, Mount Lawley, Cooloongup and Golden Bay (six days); followed by Parmelia, Beeliar, Bayswater and Butler (eight days).  

“Perth houses are selling at a remarkable rate and have done so since the March quarter 2021,” Ms Hart said. 

“While our members are reporting fewer people at home opens, they are still receiving multiple offers.  

“Naturally some buyers have been impacted with reduced purchasing power but demand is still high enough to see properties selling quickly.” 

Perth rental market  

Median rent price  

Perth’s median rent price was $500 per week during November, which is unchanged from October.   

“Population growth continues to support the strong rental market,” Ms Hart said. 

“Both net interstate and overseas migration are in positive territory for the first time since 2013 and, as many migrants prefer to rent initially, this is seeing increased demand and competition for rentals. This in turn is maintaining pressure on prices. 

“We do not expect prices to fall until the rental shortage eases.” 

Median leasing times  

It took a median of 14 days to lease a rental during November, one day faster than October and three days faster than three months ago. 

Suburbs recording the fastest median leasing times were Byford (seven days); Meadow Springs, Seville Grove and Innaloo (eight days); Canning Vale, Tuart Hill, Duncraig and Yanchep (nine days); and Mosman Park and Balga (10 days). 

Listings for rent  

There were 1,870 properties for rent on reiwa.com at the end of November, an increase of 12.8 per cent on the 1,658 reported at the end of October, but 20.5 per cent lower than the same time last year.  

“The rental shortage remains a critical issue for the WA rental market,” Ms Hart said. 

“Over the past 18 months we have seen a significant reduction in the number of private rentals as investors sell to take advantage of capital growth or take their property off the rental market for their own use.  

“We desperately need more investors, unfortunately those who want to invest are faced with the same difficulty of buying a property in this market as owner occupiers.” 

 To learn more about Perth's property market, visit our weekly snapshot.