According to the 2024 property market quarterly update by REIWA, Perth house prices are projected to increase by 10 percent in the coming year. Anticipated rent hikes are also on the horizon, though the pace of growth may slow down.
Strong Signs of Perth Real Estate Growth for 2024
Despite multiple interest rate hikes in 2023, the Western Australia property market showed resilience, experiencing accelerated house sale price growth of 2.6 percent in the December quarter and 8.3 percent over the year. This surge led to a new record median house price of $590,000 in Perth, marking a 24.2 percent increase from the 2020 low but only 8.3 percent higher than the previous peak in 2014.
While the median unit sale price remained stagnant for much of 2023, a late-year increase of 2.0 percent in the December quarter and 0.7 percent over the year brought it to a median of $408,000. REIWA CEO Cath Hart anticipates further increases in the median unit price in 2024. The median unit price, though on the rise, is still 9.3 percent below the 2014 record of $450,000.
The 2023 market set records for the median house price, median time to sell (eight days), and reached new lows for the number of properties available for sale (3,648 at the end of December). Population growth, building completions, and the state of the Western Australian economy are expected to be key drivers for the market in 2024.
Population growth is a significant factor in housing demand, with WA experiencing a 3.1 percent increase in population in the year to June, the highest growth rate in the country. However, the completion of about 14,000 new homes in the same timeframe creates a shortfall of over 20,000 dwellings, putting pressure on the established homes market and driving up prices.
A strong economy, driven by factors like employment opportunities and low unemployment, supports population growth and homebuying affordability. With the economy expected to remain robust, even potential rate hikes in 2024 are unlikely to derail the market.
Perth Rental Market
In the Perths rental market, records were also set in the final quarter of the year. The median dwelling rent reached a new high of $600 per week at the end of December, up 3.4 percent from September and 15.4 percent from December 2022. The median weekly house rent price also set a new record, rising 3.3 percent over the quarter and 12.7 percent over the year to $620.
Units, while lacking in sale price growth, compensated with rent price growth. The median unit rent price rose 3.6 percent from September and 20 percent from December 2022 to $570 per week at the end of the year, reaching a record high.
Despite low rental listings, which remained around 2,000 for most of the year and dropped to 1,518 in December, the vacancy rate remained low at 0.7 percent for the majority of the year. REIWA CEO Cath Hart anticipates continued challenges for tenants due to strong demand driven by population growth and limited supply.
Regional Western Australia
In regional Western Australia, house sale price growth varied in 2023, with some areas experiencing significant growth and others more modest increases. Rent prices in most regional centers reached record highs, and this trend is expected to continue in 2024. While house price growth may slow in certain regions, centers like Bunbury and Port Hedland are anticipated to perform well due to affordability, proximity to major attractions, and increased employment opportunities.
The shortage of properties in WA’s regions, coupled with high demand, is predicted to lead to further rent increases. Development in regional areas, particularly in response to the expanding resource sector, suggests the potential for robust rent price growth in the northern regional centers in 2024.
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