Increase in Housing Prices in Perth

According to REIWA’s forecast, housing prices in Perth are expected to rise by 10% this year. Western Australia’s strong property market conditions continue in 2022, following the price growth of 14% in 2021.

Western Australia remains one of the country’s most affordable states despite the strong price growth. This may be attributed to the fact that housing prices in most of the regions in the state have not hit the 2014-15 peaks.

Last year 63 suburbs in Perth recorded their highest ever property sale price. According to REIWA’s president, Damian Collins, the suburb’s high property sale price resulted from the state’s strong market conditions.

Last year had the most competitive buying conditions for the Perth property market with fast selling times, rising prices, and low stock. These strong and competitive market conditions increased the 63 suburbs individual residential sale price that surpassed the previous highest sales records.

14 of these 63 suburbs recorded an increase of over 20% compared to their previous highest sale prices. Baskerville had the most significant differential increase, which eclipsed its previous highest sale price of 2015 by 133%.

North Coogee followed closely at the second position with a 119% increase from its previous highest sale price in 2018.

Among the many factors contributing to this price, the rise in sub-division opportunities and large land sizes. These current property sale prices speak a lot about the strength of Perth’s market conditions.

More Perth suburbs are expected to hit their record-setting sales this year, with the state’s market conditions showing no signs of slowing down.

Current Housing Prices in Perth

This year, housing prices in Perth are expected to rise by 10% from last year’s price. Even though it was expected to be slower than last year, property owners in Australia still expected the growth to continue throughout this year. Perth’s home value index during January revealed a 0.6% monthly increase.

Perth’s median house price stands at $521,000. In January, Erskine recorded the biggest Perth median house price growth of 4.4% to $450,00. Padbury followed closely with a 2.4% median price growth to $615,000.

Closely behind Padbury was Kalamunda, with a growth of 2.1% to $725,000, followed by Harrisadale with a 2% increase to $549,000. Wembley also had significant median price growth of 1.75 to $ 1.3 million.

Cause of the Price Rise/Fall

President Collins stated that fast selling times, rising prices, and low stock are some of the reasons for the extremely competitive buying conditions in Perth. Most people may wonder the cause of the growth and fall in property prices in Western Australia, especially given that the prices are expected to fall in 2023.

The state of the economy generally influences the housing market. Like any other commodity, housing prices are determined by forces of demand and supply. Several key factors are causing an increase in the housing price index, including population, inflation, interest rates, economic growth, and stock returns.

Some of the causes of price rise in Western Australia, as highlighted by Damian Collins, REIWA’s president, are interest rates and large land sizes or subdivision opportunities.

Low-interest rates mean low mortgage repayments. Borrowers can therefore borrow at any time, increasing the demand for housing. As a result of the increased housing demand, housing prices will increase.

Another reason for price rise may be attributed to demographic factors. With an increase in population, there is an automatic increase in demand for housing facilities. The high demand will then translate to increased housing prices. There has also been an influx of people seeking residential houses, causing housing prices in Perth to go up.

Records Being Smashed in 2022

House prices rise in WA 2022 is estimated at 10%. This is a further growth from last year’s 14%. This suggests a price increase this year.

January 2022 recorded the highest increase on Perth home value index of 0.6% since May last year. According to REIWA president Collins Damian, this was an exceptional way to start the year, given that the festive season made activities lower than the previous months.

In January, another smashed record in 2022 is the significant Perth median house price. Erskine suburb recorded the biggest growth of 4.4% during the month, followed by Padbury with 2.4%, followed closely by Kalamunda and Harisdale.

President Collins also stated that the median selling times are expected to go up to around 30 to 40 days this year.

According to Mitchelle Makenzie, Shelter WA chief executive, evictions over January 2022 had also hit a peak. This is a downside to the spike. Since most landlords want to realise their assets by selling to capitalise on the house prices, many tenants are being evicted.

There has been a significant spike in evictions over January as tenants are being forced out of the houses by landlords. This has left many tenants stranded as they struggle to find other affordable houses.

These evictions have led to an increase in people looking for residential houses; hence the house prices rise in WA 2022.

 

Perth’s House Price Expected to Increase

As stated by various housing stakeholders in Western Australia, housing prices in Perth are expected to show the same increase trend in 2022. Housing prices in Perth in 2022 are expected to increase by 10% from 2021.

According to REIWA’s president Mr Collins, it is anticipated that there will be an increased sales volume in 2022. This means that there will be pressure to raise the housing prices in Perth throughout 2022.

Perth’s median house price is also expected to increase between 10% to 15% in 2022. Mr Collins also said that more investors are expected to be attracted to the housing sector in 2022. For these reasons, more rentals will be available in the market in 2022.

The strong market conditions in Western Australia are expected to continue, and therefore, house prices in WA are estimated to increase by 10% from 2021.

How Long Does it Take To Make A Sale?

With the biggest increase in Perth home values, properties just take two weeks to sell which is twice as fast as normal selling time. According to CoreLogic data, January this year recorded the highest monthly increase in sales since May last year.

In January, the median selling time was 15 days which is 6 days faster than last year and one day slower than December 2021. Harisdale was taking just 7 days to sell and was ranked one of the fastest-selling suburbs in Perth.

Real Estate Institute of Western Australia president, Damian Collins stated that the median selling times have been low for some time, and they are still low. The median selling times are expected to be around 30 to 40 days. The fact that they are still hovering around two weeks results from the intense competition for properties in Perth.

Conclusion

Zest Realty is a real estate brokerage and franchise company whose goal is to help people acquire their dream residential property. With the increased eviction in WA, due to landlords trying to capitalize on the house prices rise in WA 2022, many tenants are being evicted.

Most of these renters are left stranded as they struggle to find other affordable homes. This has become heartbreaking to most renters in WA, and for this reason, we have devoted our time to helping such people get affordable houses.

As a full-time real estate brokerage company, we help clients make housing decisions and obtain housing at a very affordable price. With the expected price growth, more evictions are expected, automatically increasing the number of people looking for residential houses.

This may make it even more difficult for tenants in Perth. Contact us today for your housing needs in WA.