Perth house prices could hit $740k by 2025
The city’s market continues to run hot with Perth’s median house sale prices on track to achieve growth of more than 20 per cent over 2024.
Based on the current trajectory of the Perth market, the Real Estate Institute of Western Australia’s (REIWA) CEO, Cath Hart, relayed that Perth’s median house sale price could reach $740,000 by the end of 2024.
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Commenting on the conditions behind this rise, Hart stated that “demand remains strong, houses continue to sell in record time and prices keep rising”.
“Currently, Perth’s median house price at the end of June was $668,000, already 11.3 per cent higher than at the end of December 2023 and 22.6 per cent higher than the previous peak of $545,000 set in 2014,” said Hart.
She also detailed that the median unit sale price was anticipated to hit a new record in the coming months, growing by 8.3 per cent since December 2023 to reach $445,000 at the end of June 2024.
“This is just $5,000 below the previous peak of $450,000 set in 2014, and if the current trend continues, it will exceed this very soon.”
The CEO said the market’s momentum had been propelled by “strong population growth and constraints in the building industry”.
“WA recorded 3.3 per cent population growth in the year to December, which included about 79,000 net arrivals through overseas and interstate migration.
“That’s about twice the population of Baldivis, which significantly boosts the demand for housing,” voiced Hart.
Even with new home starts now being completed in quicker time frames, the CEO stated that “Perth’s overall housing completions remain low, so we have an ongoing imbalance between supply and demand”.
Based on this current market outlook, Hart said that there would need to be an “unexpected change in current conditions to slow Perth dwelling price growth”
Perth rental market
Even with Perth’s median rent prices currently at record highs, REIWA relayed that they remained stable over the June quarter after several periodic increases.
Alongside this stability, the institution further cited the “increase in median time to lease and the number of rental listings” as all suggesting that the rental market was “easing slightly”.
Hart relayed that demand within the city’s rental market had been “self-moderating”, sharing that “we’ve seen an increase in tenant household sizes as people seek to share the cost-burden of renting, and people are choosing not to rent if possible which has changed the nature of demand”.
The CEO stated that the rental market was “benefitting from the completion of investor-owned new builds”, which are adding to the rental supply.
“According to ABS data, investors made up 3.6 per cent of loans for the construction of dwellings in the 12 months to May 2024. This compares to 13.8 per cent in the 12 months to May 2022.
“Supply will continue to increase as more of these homes are completed in the coming months,” stated Hart.
While Perth’s median dwelling price was recorded as $650 per week at the end of June, unchanged from March 2024, this figure still registered as 8.8 per cent higher than December 2023.
Similarly, the city’s median weekly house rent price of $650 per week also did not change from March 2024, but nonetheless registered as 4.8 per cent higher than at the end of 2023.
Perth’s median unit rent price of $600 per week also remained static from March 2024, and was recorded as being 5.3 per cent higher than six months ago.
Within the varying conditions across Perth’s rental market, Hart noted that there had been a “fall in demand for properties over the median rent price, with homes taking longer to rent and some discounting occurring”.
“The market has reached an affordability ceiling so while there could still be growth in median rent prices over the remainder of 2024, it is likely to be small,” Hart concluded.