The surprising reason Perth unit prices are on the rise
The price between houses and units is shrinking across the country. In Perth, new data reveals why homes in multidwelling developments are taking off.
Digging into the data, the Real Estate Institute of Western Australia (REIWA) puts the growing interest in units paradoxically down to the long-term appeal of houses.
According to REIWA, the unit segment of the market has been experiencing exponential price growth due in part to an increase in values for villas and townhouses. Extra competition in these subsectors can largely be attributed to buyers in search of houses widening their search to include options that offer similar amenities to houses, such as ample outdoor space and an independent feel compared to apartments.
REIWA CEO Cath Hart said the growing interest in these dwelling categories is “understandable” given broader market demand.
“Buyers generally prefer houses – we all like our own patch of land – however competition for houses is high,” Hart said.
“Villas and townhouses are fairly similar to houses. They may not be set on their own block, but they often come with some ‘land’, usually in the form of private courtyards, and the low-maintenance aspect also appeals to buyers,” she added.
Flats have also been growing in popularity, reflecting an increasing congregation of buyers in more affordable market segments, according to Hart.
“Flats are often a great way for first home buyers to enter the market. They also offer good value for investors,” she said.
In her view, the latest data confirms that medium-density housing can play a wider role in Perth, if these homes are built in appropriate locations and tailored to market demand.
“There is often talk about density in Perth and these stats show buyers are quite willing to embrace medium-density living, we just need to build more of these types of homes and in locations where buyers want to live,” Hart said.
Overall, Perth’s median unit price rose 3.8 per cent to $415,000 over the 12 months to February 2024 – a 10.7 per cent increase from the recent low price of $375,000 in August 2020. The segment still has a ways to go to hit its previous high of $450,000, recorded in February 2015.
The median sale price for villas rose 10.7 per cent to $420,500 in the year to February, which is a new peak for the property type.
Townhouses are also at their peak, having increased 5.8 per cent over the past year to $592,500 – a substantial increase from their low of $500,000 in October 2020.
The median price for a flat, meanwhile, jumped 10.2 per cent over the year to February, bringing the median price to $270,000 from a low of 200,000 in July 2020. The recent high for this property type was recorded in March 2015, when flats were selling for a median $315,000.
Hart believes for the foreseeable future, units will continue to move quickly with prices set to stay on their upward trajectory.
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