Perth Real Estate Market Report: Record-Low Listings and Soaring Prices in September wrap up

septmeber market wrap up

If you’re keeping an eye on the Perth real estate market, September 2023 brought some truly exceptional developments that are reshaping the landscape. Strong demand for homes in the region has led to a remarkable decrease in available listings, while property prices surged to unprecedented heights. In this blog post, we’ll delve into the latest data from REIWA (Real Estate Institute of Western Australia) and the CoreLogic Home Value Index to give you a comprehensive overview of what’s happening in Perth’s real estate scene.

Record-Low Listings

At the end of September, the number of homes available for sale plummeted below 5,000, marking the lowest level in three decades. REIWA CEO Cath Hart was astounded by this record-breaking drop in listings. “The median house price rose to $570,000 in September, which is 5.6% higher than a year ago and 4.6% higher than the previous record set in 2014-15,” she noted. This robust demand was further highlighted by the median time to sell a property, which dropped to a record low of just nine days for the month.

The consequence of this overwhelming demand was a significant decrease in the number of available listings, with only 4,931 homes listed on REIWA’s website by the end of the month. This represents a 4.9% decrease compared to the final figures for August and a staggering 39.5% drop from the previous year.

While the median house price experienced an impressive increase, the median unit price remained stable at $400,000. It was 2.4% lower than September 2022 and 2.9% below the previous high of $412,000 set in 2021-22.

Top-Performing Suburbs

For those in the market for house price growth, several suburbs in Perth stood out in September. Halls Head, Embleton, Hillarys, East Fremantle, and Bassendean experienced significant increases, with Halls Head leading the pack at 3.1%. Additionally, Westminster, Balcatta, Rivervale, Golden Bay, and Doubleview all recorded growth rates exceeding 1.4%.

Fastest Selling Suburbs

Some suburbs in Perth witnessed remarkably fast property sales in September. Dudley Park and Seville Grove topped the list with an average time on the market of just three days, followed by Coodanup, Cooloongup, and Secret Harbour at four days. Armadale, Tapping, Butler, Caversham, and Greenfields all had properties selling within five days.

What’s intriguing about these fast-selling suburbs is that, with the exception of Tapping, they all have median house prices below the Perth median. This suggests that affordability plays a vital role, with buyers swiftly acting upon value. These areas also offer attractive rental yields ranging from 5% to 7%, making them particularly appealing to investors.

CoreLogic Home Value Index

According to the CoreLogic Home Value Index, Perth was among the top three performers for September, showing a growth rate of 1.3% over the month. Adelaide recorded the highest increase in dwelling values at 1.7%, while Brisbane also reached a growth rate of 1.3%.

In the year leading up to September, Perth was the strongest-performing capital city with a significant increase in dwelling values, reaching 8.8%. Sydney was the next best performer, but it lagged behind Perth at 7.3% growth.

Perth Rental Market

Rental prices in Perth continued to maintain their record highs in September. The median weekly dwelling rent remained stable at $580, which is unchanged from the final figures for August and 17.2% higher than a year ago. House and unit rents also remained steady at $600 and $550 per week, respectively.

REIWA CEO Cath Hart expressed that while stability is appreciated, market conditions indicate that more price increases are likely in the near future. The Western Australian region is experiencing substantial demand, and there is a limited supply of rentals available, creating a significant supply-demand imbalance that is expected to persist.

Top Rental Growth Suburbs

Among the suburbs that saw significant growth in their median rent prices in September were Highgate, Inglewood, Greenwood, Wembley, and Bentley, with increases ranging from 19% to 30%.

Listings for Rent

As of the end of September, there were 1,653 properties available for rent on REIWA’s website. This represents a slight improvement compared to August but is 22.2% lower than three months ago and 4.1% lower than September 2022.

Median Leasing Times

The median time required to lease a rental property in September was 14 days, one day faster than August. Suburbs with the quickest median leasing times were Byford and Melville (eight days), Thornlie, Hamilton Hill, Nedlands, Padbury, and Willetton (nine days), along with Clarkson, Doubleview, and Yanchep (10 days).

Financial Stress on Households

Lastly, while Western Australia remains one of the more affordable places for both homebuyers and renters in the country, rising interest rates and rents have begun to place significant financial stress on households. Mortgage holders have seen a 48% increase in repayments on the average mortgage in WA since interest rates started rising. Meanwhile, the median dwelling rent has increased by 23%. This significant supply-demand imbalance is exerting pressure on prices, and it is unlikely to change in the near future.

To address this, it’s essential to maintain a strong level of new home building starts and create a legislative environment that encourages investment. This will help alleviate the gap between supply and demand, ultimately stabilizing house and rent prices.

In conclusion, the Perth real estate market is experiencing an unprecedented surge in demand, resulting in record-low listings and soaring property prices. While this presents exciting opportunities for sellers, it’s crucial to keep an eye on market dynamics and consider the implications for both buyers and renters in the region. Stay tuned for more updates as we continue to monitor this dynamic real estate landscape.

Contact David Beshay for all your property related questions here

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