The number of properties available for sale in Perth dropped to 5,885 by the end of May, marking an 8.8% decrease compared to April and a significant 29.3% decline from the previous year. This level of property availability has not been seen since mid-2010.
Despite experiencing 11 interest rate increases, the demand for homes in Perth has remained strong, according to REIWA CEO Cath Hart. Homes are now being sold at a median rate of 12 days, which is the fastest recorded since data collection began in 1998, with a similar occurrence observed in March 2021. Even with another recent interest rate hike, the expectation is that the demand will continue to be robust.
The population growth in Western Australia is a contributing factor, as more people opt to purchase established homes instead of dealing with the rental market. Rising costs and ongoing delays in the construction industry have also prompted individuals to buy rather than build.
Over the past two months, the number of property sales has outpaced new listings, resulting in a significant decline in available homes for sale on the REIWA website. Since mid-April, sales have consistently exceeded new listings by 15%. This trend of higher sales compared to new listings is uncommon and has only occurred a few times in the past 13 years, and never for two consecutive months. If this trend continues, the number of properties available for sale is likely to decrease further.
Despite the decrease in available properties, Hart assures potential buyers that new listings are still entering the market at reasonable rates. While there was a slight decline in new listings in April, it was anticipated due to the holiday season. May saw an increase in new listings, but significant growth is not expected in the next few months, as it is typically lower during the winter season, with a traditional increase in the spring. The limited availability of properties for sale is primarily due to the speed at which homes are being sold. Hart advises buyers to remain patient and persistent, as opportunities will arise.
Houses remain the most sought-after property type, with the number of available houses falling below 2,700, a level not seen since April 2010. The highest sales activity is observed in the price bracket of $500,000 to $1 million, while sales numbers have declined in the under $500,000 bracket.
The CoreLogic home value index reveals that Perth’s property values have remained stable. In May, the Perth home value index increased by 1.3%, and over the past three months, it has risen by 2.4%. Among the major capital cities, Perth and Adelaide are the only two showing year-on-year growth, with Perth being the only capital city where dwelling values have returned to record highs.
According to data from the REIWA website, the suburbs that experienced the highest house price growth in May were Hillarys (5.8% increase to $1,100,000), Kinross (2% increase to $632,500), Halls Head (1.9% increase to $540,000), Secret Harbour (1.8% increase to $539,500), and Melville (1.3% increase to $1,002,500). Other suburbs, including Parmelia, Seville Grove, Warnbro, Golden Bay, and Byford, also recorded growth above 1%.
Regarding the rental market, the median weekly rent for dwellings in Perth remained stable at $550 in May, compared to April. However, it has increased by $20 (3.8%) in the past three months and by $80 (17%) compared to May 2022. The median weekly rent for houses decreased slightly from $575 in April to $565 in May, while the median weekly rent for units remained unchanged
