Perth boom continues: City charges ahead as larger capitals lose steam

The results extended the city’s growth streak to 14 consecutive quarters – the longest uninterrupted stretch since the 2000s.

When it came to annual gains, Perth continued to outperform the rest of the nation, recording growth of 24.6 per cent.

Perth’s unit market also showed signs of surging, with prices climbing 6.0 per cent, or $39,857, over the quarter to a record $700,351.

Annual growth in the unit market rose to 27.8 per cent, the highest in the country, and the strongest result since 2006, outperforming houses amid strong demand and tight supply.

Domain’s chief residential economist, Dr Nicola Powell, said Perth continued to be a standout in the national market, with price rises driven by low supply and above-average population growth.

Powell also said the undersupply was partially caused by high construction costs from ongoing infrastructure projects, and investor demand putting pressure on the market.

“It's had a tight rental market, which factors in; there’s also been heightened interest from investors,” she told Smart Property Investment.

“So all of these factors together have really played into continuous rates of price growth for Perth.”

In stark contrast, Melbourne and Sydney recorded their first quarterly house price declines in years, with falling buyer sentiment hitting the two largest markets the hardest.

Powell said the results showed the housing market was no longer in sync, with affordability pressures and borrowing capacity driving different outcomes between the East and West coasts.

Powell said affordability constraints were far less binding on Perth than Sydney and Melbourne, which had been heavily impacted by changing sentiment and borrowing limits.

“Buyers haven’t disappeared, but they’re behaving very differently. There’s less urgency, more negotiation and a much sharper focus on affordability,” she said.

“Houses in the most expensive markets are feeling the interest rate pressure first, while units are holding up better as buyers reset expectations and look for safer, more accessible price points,” Powell concluded.

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