‘Nearology’ factor pushing double-digit growth in these WA suburbs

For example, two similar mid-80s four-bedroom, two-bathroom properties situated on a 700-square-metre block in Parkwood and the other in Willetton both sold in June 2021 but with a significant value difference. The house in Parkwood was sold for $560,000, while the one in Willetton was sold for $820,000. The $260,000 difference between the two properties is the “nearology” factor, Mr Hinchliffe explained.

“The difference in value is due to the different school catchment zones of both properties,” he pointed out.

In Mullaloo, a beachfront community further north, the housing market experienced a significant 21.9 per cent rise in annual growth, resulting in a $144,000 median house price increase. Mr Hinchliffe reported that this double-digit growth was also observed in the apartment and unoccupied land segments, which recorded 60.4 per cent and 74.9 per cent increases, respectively.

The HTW Western Australia director highlighted that the “nearology” factor has been replicated in some of Perth’s western suburbs, which has resulted in sharp rises in median prices during the last 12 months.

Cottesloe has grown by 33.2 per cent, Dalkeith by 28 per cent, and City Beach by 37.3 per cent, values which are a far cry from Perth metropolitan’s average gains of 8 per cent.

To illustrate growth, Mr Hinchliffe mentioned a four-bedroom, two-bathroom home in City Beach, just one block from the shore. In March 2020, the property was bought for $1.85 million and was resold for $2.45 million in August 2021, resulting in a 32 per cent increase in the property’s value with only minimal renovations done by the owners.

Another remarkable example cited by Mr Hinchliffe is a stylishly renovated circa 1940s four-bedroom, two-bathroom home on a 759-square-metre block in Cottesloe. The property was purchased for $2.025 million in July 2019 and, after renovations, was listed seeking for offers in the mid to high $3 million range. The property sold for $3.8 million in July 2021 after 36 days on the market, showing a sharp price rise of 88 per cent.

As a final example, Mr Hinchliffe noted that in Nedlands, a four-bedroom, two-bathroom two-story home on a quarter-acre property was purchased for $2.9 million in February 2020 after 11 days on the market. It was resold as is for $3.28 million in July 2021 after just 10 days on the market, resulting in a 13 per cent price increase in just 17 months.

In summary, Mr Hinchliffe stated that low stock levels in Western Australia made the market more competitive, with house sales and values consistently on an upward trend throughout the year.

“If anything, we underestimated the depth of demand in the market which shows no signs of abating,” he said.

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