Could migration cause Perth’s property market more harm than good?
A buyers’ agent in the West Australian capital has warned the city’s mass migration is putting sustained pressure on its property and rental market.
Citing recent data from the Australian Bureau of Statistics (ABS), which indicated Perth’s population expanded 1.3 per cent in the 2021–22 financial year, Peter Gavalas of Resolve Property Solutions believes this trend was inspired by the city’s housing affordability of late.
Despite CoreLogic’s latest Home Value Index highlighting Perth as one of three Australian capital cities to record positive annual growth for 2022 (3.6 per cent), the city’s median home value currently sits at $561,000, nearly half a million below Sydney’s.
Also attracting migrants into the state is the nation-leading median weekly salary of $1,305.
Mr Gavalas has previously preached for government intervention to draft overseas workers into the West Australian market to live and purchase a home in a way to relieve pressure on the rental market.
“You’re paying less on your home loan while earning a great wage, so you should have plenty left over to make the most of every lifestyle opportunity available — whether that’s enjoying the city’s thriving restaurant and entertainment scene or the state’s many natural wonders,” he said.
However, the city remains gripped by a housing supply crunch, ratified by recent findings from SQM Research that revealed Perth’s December 2022 vacancy rate was 0.6 per cent.
In October last year, the Real Estate Institute of Western Australia (REIWA) revealed the city’s rental supply had hit a 12-year low, with just 1,675 properties available for rent.
As such, rents in the city rose 11.2 per cent last year, according to CoreLogic, culminating in median rents of $553. In a similar vein, Mr Gavalas said unit rents climbed 10.4 per cent last calendar year.
According to him, the city’s great influx of migration has impacted its property market, with research from SQM Research indicating the number of Perth properties advertised for sale fell 7.4 per cent in 2022.
Mr Gavalas revealed he’s “not surprised that Perth was only one of two capital cities to see a fall in total listing volumes over the year. Properties are being snapped up quickly by both investors and relocators, particularly in the more affordable price brackets.”
He concluded that “it’s likely these strong conditions will continue, with Perth values forecast to rise up to 5 per cent this calendar year, driven by interstate migration”.
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