Perth unit prices reach decade-high levels

Speaking on the conditions leading up to this growth, Joe White, president of the Real Estate Institute of Western Australia (REIWA), relayed that it has “been a long wait for unit owners”.

“The median house sale price exceeded its 2014 peak in December 2022 and has been experiencing strong growth since then,” said White.

“The unit market was slower to respond to market conditions, and prices were fairly stable over 2023, but growth has accelerated this year and seen it equal the previous record.”

Explaining this rapid growth, White highlighted the “rising demand for units, which provide a more affordable entry point to the market for buyers, particularly in suburbs close to the CBD”.

“More price growth is expected over 2024, which will be welcome news for unit owners,” he stated.

The president further detailed that the increase in demand for units in Perth was reflected in recent data on new unit listings and sales.

“New unit listings in 2023–24 were 13 per cent higher than the five-year average, but sales were 26.6 per cent higher than the five-year average.”

White noted the increased demand for units is also evident in their current “record low” days on market, with units in Perth being sold in a median of nine days in July, two days faster than June and seven days faster than this time last year.

“The change in demand for units can be seen in the change in its median time on market, falling from 16 days a year ago to nine days now.”

Median house sale prices in Perth also continue to rise, reaching $675,000 in July, marking a 2.3 per cent increase on the $660,000 recorded in June, and 19.5 per cent higher than July 2023.

With the city’s houses being sold in a median of nine days in July, one day slower than June and one day faster than a year ago, White stated that houses are also selling in “record time frames”.

The city’s active listings have “settled” at 3,279, registering as 2.6 per cent lower than June and 36 per cent lower than a year ago.

Even with active listings in Perth remaining at “record lows”, White emphasised that “the data tells a different story”.

“The number of settled sales for 2023–24 is already 2 per cent higher than 2022–23, and this will increase as more properties settle.”

“Properties have still been coming to the market in good numbers, but they are literally flying off the shelves, as shown by the low days on market.”

Perth rental market

With 2,507 properties available for rent at the end of July, the REIWA stated that this is 1.3 per cent higher than June, and 34.6 per cent higher than the same time last year.

“Rental listings are rising slowly each month, which is a positive sign for prospective tenants,” explained White.

“Members continue to report more completed new builds coming to market. These include a number of dual-key properties, which in effect adds two new residencies to rental supply.”

The institution also relayed that the city’s rental market continues to ease, with both median dwelling and house rents remaining stable at $650 per week in the month to July 2024.

Median weekly dwelling rent was found to have risen 18.2 per cent year-on-year, while the median weekly house rent was recorded as being 12.1 per cent higher than 12 months ago.

The median weekly unit rent increased to $620 in July 2024, marking a 3.3 per cent increase from June, and 17 per cent higher than this time last year.

Despite the rise in the median unit rent, White remarked that the “market appeared to have reached an affordability ceiling”.

“Tenants cannot keep up with constantly rising rent prices. They are either renting with other people to share the cost burden or seeking to rent smaller more affordable properties.

“This month’s rise in the unit price is likely to be a result of the demand for more affordable rentals.

“We expect to see more periods of rent stability over the year,” White concluded.