Property market update: Perth, April 2021

Buying a house in Perth is now almost $30,000 more expensive than it was at the start of 2021, as the median dwelling price in the WA capital tipped over $500,000 in April. This is the first time since December 2018 that house prices in the city rose above the half a million threshold. 

Perth’s property market also recorded its ninth consecutive month of growth,  despite the monthly pace easing to 0.8 per cent in April from 1.8 per cent increase in March.

Further highlighting Perth’s rebound, a total of 20 suburbs have recorded 10 per cent price growth or higher since the start of the year, according to data from reiwa.com. Additionally, the median time to sell a home in the capital city stood at 13 days at the end of last month – two days less than March 2021 and 24 days faster than in April 2020.

REIWA president Damian Collins said that the figures are a testament to the strength of Perth’s real estate market, which didn’t stumble amid the recent public holidays and another COVID-induced lockdown. 

With the strong market conditions prevailing in the city, Perth seems to be on track to hit REIWA’s forecasted growth of 15 per cent in 2021, or even surpass it. The question on everyone’s mind now is if the WA capital is capable of maintaining this momentum as the year progresses. 

Here are the highlights of Perth’s property market in April 2021. 

Property values 

CoreLogic data shows Perth’s home value index lifted 0.8 per cent in April, the lowest rate of month-on-month growth amongst the capital cities and a substantial slowdown from the 1.8 percent gain recorded in March. However, the monthly increase brings the median dwelling value in the city to stand at $513,598, pushing average prices to breach the $500,000 median house price ceiling for the first time since December 2018.

Perth’s median house price increased to $537,020 in April, up from $532,187 in March. Meanwhile, the median prices of units in the city stood at  $387,658 in April, modestly higher than the $385,265 recorded in the prior month. 

Data from REIWA shows that Perth’s median house sale price now sits at $508,000, the highest it has reached in just under three years. The figure is also up from $495,000 in March and $480,000 in December 2020.

Adding to the city’s overall growth, REIWA reported that as many as 87 suburbs recorded an increase in the median house sales price in April. Leading the pack was Bullsbrook with a 7.8 per cent increase to $352,500, followed by Bicton (up 6.6 per cent to $1.14 million), Wilson (up 3.9 per cent to $533,500), Mount Lawley (up 3.5 per cent to $1.035 million) and Secret Harbour (up 3.3 per cent to $445,500).

Other top performing suburbs were Swanbourne, South Perth, Mandurah, Pinjarra and Victoria Park.

REIWA has forecast 15 per cent growth for Perth property this year. However, some local suburbs are on track to exceed that, surging 10 per cent or more in just four months.

Analysing the figures, Mr Collins noted that it’s not only the higher end of the market showing strong growth and a broad based price surge is being seen across the city. “Six to eight months ago it was mainly the higher end of the market showing strong growth, but now we are seeing movement across the board,” he said. 

“For these suburbs to be only a third of the way through the year and already achieving price growth of this magnitude is quite impressive,” he added. 

Supply and demand 

Despite listings in Perth rising 5.8 per cent to over 8,700 properties at the end of April, “buyer appetite is still very strong and sellers continue to enjoy the quickest turnaround in sale times that they have in more than 15 years”, Mr Collins said.

The median time to sell a home in the WA capital  stood at 13 days at the end of the previous month – two days less than March 2021 and 24 days faster than in April 2020.

REIWA data showed that  28 suburbs in Perth had a median selling time of under 10 days, including Subiaco (five days), Noranda (six days), Tapping (six days), Harrisdale (seven days), Kinross (seven days), Ocean Reef (seven days), Padbury (seven days), Palmyra (seven days) and Alexander Heights (eight days).

“On an annual basis, though, there are 25 per cent fewer properties for sale than this time last year, so demand is still outweighing supply,” Mr Collins noted.

Monthly figures released by SQM Research showed that total listings in the capital city rose  by 5 per cent to  22,467 in April from 21, 300 in March. Louis Christopher, Managing Director of SQM Research said that  demand continued to be strong despite the monthly increase in new stock, as old listings continued to decline. 

Both experts are in agreement that the current property market conditions are starting to entice more sellers to the market, which is helping to keep up with demand and provide buyers with more options. 

Auction market 

There were 2,087 capital city auctions held in the last week of April, clocking in at a final auction clearance rate of 77.2 per cent, down on the 78.6 per cent recorded over the previous week, when 2,467 properties went under the hammer. Perth had only 23 property auctions in the week ending 25 April 2021. 

The final clearance rate for houses fell below 80 per cent for the first time this year, coming in at 79.1 per cent. Meanwhile, units recorded a final clearance rate of 70.3 per cent, a modest improvement on the 69.9 per cent clearance rate recorded the week prior.

Rental market

During April, the listings for rent in Perth rose 2.5 per cent, with 2,731 properties available for rent on reiwa.com at the end of the month.

“This is an encouraging sign and only the third time in the last 12 months that we have seen listings for rent increase in Perth. Now that the rental moratorium is over, it appears investors are starting to return to the market, which is something we desperately need to help rectify the state’s rental shortage,” Mr Collins said.

“Although there is still a long way to go, this is a positive trend and one we hope will gather more momentum in the coming months,” he added. 

Despite the increase in the number of listings, Perth’s median rent price rose $10 to $420 per week in April. The monthly rent levels have not been seen since June 2015, but are still lower by $30 per week than the peak median rent of $450 seen in 2014. This means that Perth tentans continue to enjoy some 

Data from REIWA revealed that 38 suburbs recorded an increase in median house rent price during the month, with the strongest performers being Mount Pleasant (up $30 to $580 per week) and Seville Grove (up $20 to $350 per week).

Other suburbs to perform well were Wilson, Aveley, Midland, Gosnells, Maddington, Waikiki, Alkimos and Spearwood. 

According to Corelogic, gross rental yields in the city rose to 4.40 per cent in April from  4.28 per cent in the same period last year. 

Vacancy rates

Vacancy rates across Perth lifted marginally, climbing by 0.1 percentage point from March to 0.8 per cent in April. In April 2020, vacancy rates in the city stood at 2.5 per cent, indicating a significant tightening of the WA capital city’s rental market over the year. 

The areas with the highest vacancy rates across Perth are Perth City (1.6 per cent), Cottesloe – Claremont (1.5 per cent), South Perth (1.1 per cent), Melville (1 per cent) and Belmont – Victoria Park (0.9 per cent). Meanwhile, Wanneroo (0.3 per cent), Kwinana (0.4 per cent), Stirling (0.4 per cent), Rockingham (0.5 per cent) and Kalamunda (0.5 per cent) had the lowest vacancy rate during the month. 

Outlook 

So, what are in the cards for Perth’s property market for the second quarter of the year? 

Overall, experts remain bullish about Perth’s outlook for 2021. REIWA has revised its  property price forecast from 10 per cent to a 15 per cent jump after heated market activity in the March quarter, while ANZ has estimated a 19 per cent surge for the WA capital.

And while the threat of COVID still looms for the rest of the country, Mr Collins positively noted that Perth can easily overcome any COVID-induced setbacks. 

“The two instances of COVID-19 community outbreak that have occurred since 23 April should have a minimal short-term impact on the market provided Perth can get on top of the outbreaks quickly. If there are no sustained lockdowns or significant economic impact, REIWA anticipates that the Perth property market will continue its strong recovery,” Mr Collins said