Why a winter slowdown shouldn’t deter property investors looking at Perth

As put by Real Estate Institute of Western Australia (REIWA) president Damian Collins, “We are just 12 months into this current growth cycle and prices in Perth are already up almost 11 per cent, with the bulk of that growth occurring in the first six months of this year.”

“For comparison, the total price growth recorded during the first 12 months of the previous upcycle was 6 per cent,” he said.

While the growth rate of Perth-based properties has slowed over the winter months, Mr Collins said that this isn’t unusual “given we are in the middle of one of Perth’s wettest ever winters”.

“Interestingly, this was a similar trend observed during the previous growth cycle,” he added.

According to the REIWA, Perth’s growth rate dipped to 0.2 per cent during June 2012 before recovering in the later months of the year.

Mr Collins is expecting a similar tailwind at the end of 2021.

“That growth cycle continued for a further 24 months following June 2012, which sets a good precedent for why we shouldn’t read too much into winter slowdowns,” he said.

Mr Collins said that thanks to low listing stocks and strong buyer demand, “there is still plenty of opportunity for price growth in the Perth market”. 

Listings for Perth houses fell 6.2 per cent in July and 11.9 per cent over the last three months.

Banksia Grove recorded the biggest fall, with listings dropping by 44 per cent. Lockridge almost managed to match that with a 37 per cent decline. Meanwhile, Darlington, Glendalough and Helenva Valley all reported a 33 per cent decline in listings.

Meanwhile, Perth’s overall house values crept upwards in July, with CoreLogic’s home value index for the city recording a 0.3 per cent rise.

This incremental growth brings Perth to a total of 11 per cent growth over the last 12 months, with the median house sale price now sitting at $520,500. 

“Once we move into the spring selling season and the warmer weather descends, we expect that the Perth market recovery will start to accelerate again,” Mr Collins predicted.