Property market update: Perth, April 2022

<p><span style="font-weight: 400;">While the majority of capital cities brace for a widespread retreat in dwelling values in the face of looming rate hikes, rising supply, and weakening demand, <span class='b-autolinkshadowbox'>Perth<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/tas/7300/perth>Perth, TAS</a> <a href=https://www.smartpropertyinvestment.com.au/data/wa/6000/perth>Perth, WA</a></span></span> bucked the trend by hitting a new milestone in April. </span></p> <p><span style="font-weight: 400;">The latest data from CoreLogic showed that the West Australian capital’s property values reached a new record high during the month, as the 1.1 per cent monthly gain took the city’s market values 0.9 per cent higher than the previous record high seen in June 2014. </span></p> <p><span style="font-weight: 400;">The property data provider reported that Perth’s dwelling values have risen by a cumulative 24.5 per cent from June 2020 to April 2022. </span></p> <p><span style="font-weight: 400;">According to CoreLogic’s head of research in Australia Eliza Owen, it has taken 94 months for the Perth market to stage a recovery in property prices. </span></p><div class="dfp-ticker interscroller f" data-catid="85" data-pcount1="87"> <div class="kevel" > </div> </div> <p><span style="font-weight: 400;">Perth dwelling values saw a peak to trough decline of 20 per cent between June 2014 and September 2019 – indicating a $95,000 fall in dwelling value over a period of 5.3 years, CoreLogic’s data revealed.</span></p> <p><span style="font-weight: 400;">“As it stands, growth in the Perth dwelling market has been led by houses, with unit values still 13.6 per cent below the record high seen in September 2013,” Ms Owen stated. </span></p><div class="b_gxh"> <div class="moduletable"> <script type="text/javascript"> var typesArray = { desktop: [882], tablet: [4223], mobile: [1578], }; var zoneArray = [253991]; var zoneDivId = '#mm-azk257428-zone'; changePlacements(true, zoneDivId, typesArray, zoneArray, ''); </script> <div id="mm-azk257428-zone"></div> <style> #mm-azk257428-zone { width: fit-content; margin: auto; } #mm-azk257428-zone img { max-width: 100%; height: auto; } </style> </div> </div> <p><span style="font-weight: 400;">The expert said that it was a positive mix of factors that has primed the market for growth.</span></p> <p><span style="font-weight: 400;">“Recent growth in home values has been supported by a recovery in mining activity, a sub-4 per cent unemployment rate, strong jobs growth, and positive interstate migration to WA since the September 2020 quarter,” Ms Owen explained. </span></p> <p><span style="font-weight: 400;">Weighing in on the figures, REIWA president Damian Collins said that with another solid month of price growth recorded, the Perth property market was firmly on track to achieve 10 per cent price growth in 2022. </span> </p> <p><span style="font-weight: 400;">“The Perth property market remains in a very good position for continued price growth. Even with interest rate rises expected soon, REIWA does not anticipate this will adversely impact our local market,” Mr Collins said.</span></p> <p><span style="font-weight: 400;">On 3 May, the </span><a href="https://www.smartpropertyinvestment.com.au/finance/23740-rba-hands-down-much-awaited-may-cash-rate" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">Reserve Bank of Australia increased the cash rate by 25 basis </span></a><span style="font-weight: 400;">points — the first hike in the central bank’s official rate in 11 years. </span></p> <p><span style="font-weight: 400;">However, Mr Collins only doubled down on his growth forecast in the wake of RBA’s decision, pointing out that the figures have factored in the interest rate rises that were expected to occur in 2022.</span></p> <p><span style="font-weight: 400;">He added that REIWA does anticipate moderate rises to have much impact on the local property market due to several factors. </span></p> <p><span style="font-weight: 400;">“With low levels of stock for sale and building completions still sluggish, continued strong demand from buyers suggest the Perth residential sales market will be buoyant for some time,” Mr Collins explained. </span></p> <p><span style="font-weight: 400;">The local expert added that another key reason why REIWA does not anticipate interest rate rises having the same impact on the local market is its housing market’s relative affordability compared to other capital markets. </span></p> <p><span style="font-weight: 400;">“However, the good news is that WA has some of the most affordable housing in the country, which means most buyers will be able to afford price increases and the looming interest rate rises,” Mr Collins said.</span></p> <p><span style="font-weight: 400;">Will Perth continue its growth streak in the coming months? Or will there be unexpected headwinds that will derail the West Australian capital recovery? </span></p> <p><span style="font-weight: 400;">For now, let’s see how Perth’s market performed in April 2022. </span></p> <p><b>Property values</b></p> <p><span style="font-weight: 400;">CoreLogic’s latest data showed dwelling values in Perth recorded a 1.1 per cent increase over April, a 0.1 per cent gain from March.</span></p> <p><span style="font-weight: 400;">The figures mark the fourth consecutive month of growth for the city and continued recovery from the 0.1 per cent drop in property values recorded in October 2021. </span></p> <p><span style="font-weight: 400;">On a quarterly basis, property values are up by 2.4 per cent, up from the 1.9 per cent growth recorded in the previous rolling three-month period. </span></p> <p><span style="font-weight: 400;"></span><span style="font-weight: 400;">Compared to April 2021, the average price of a property in Perth is now up 6.7 per cent, with the median dwelling value in the city now at an all-time high of $552,128. </span></p> <p><span style="font-weight: 400;">Despite the almost $17,000 month-on-month increase in median dwelling prices, Perth still has the second-lowest dwelling value of the capital cities behind Darwin at $501,182.  </span></p> <p><span style="font-weight: 400;">Data also showed median values for houses in Perth rose 1.2 per cent over the month, speeding up from the 1 per cent gain seen in March. </span></p> <p>T<span style="font-weight: 400;">he monthly gains brought the city’s annual growth up to 6.9 per cent, with the average price of a house in Perth currently standing at $578,751. </span></p> <p><span style="font-weight: 400;"></span><span style="font-weight: 400;">Meanwhile, the city’s unit market saw a meagre 0.3 increase over April, slowing down from the 1.4 per cent gain seen in March. </span></p> <p><span style="font-weight: 400;">On an annual basis, the median price of a unit in Perth is up 4.7 per cent, with the average price tag of an apartment now at $409,747. </span></p> <p><span style="font-weight: 400;">Separate data from REIWA showed Perth’s median house sale price stood at $525,000 during April, with the figures unchanged from the previous month. </span></p> <p><span style="font-weight: 400;">The suburbs to record the biggest median price growth during the period were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6019/wembley-downs>Wembley Downs</a> (up 2.9 per cent to $1.31 million), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6109/maddington>Maddington</a> (up 2.8 per cent to $360,000), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6169/waikiki>Waikiki</a> (up 2.7 per cent to $407,125), <span class='b-autolinkshadowbox'>Carramar<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/wa/6031/carramar>Carramar, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/nsw/2163/carramar>Carramar, NSW</a></span></span> (up 2.7 per cent to $565,000) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6015/city-beach>City Beach</a> (up 2.5 per cent to $2.33 million).</span></p> <p><span style="font-weight: 400;">Other suburbs that saw significant gains in median house prices during the month were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6065/wanneroo>Wanneroo</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6108/thornlie>Thornlie</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6066/ballajura>Ballajura</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6018/karrinyup>Karrinyup</a> and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6012/mosman-park>Mosman Park</a>.</span></p> <p><b>Supply and demand</b></p> <p><span style="font-weight: 400;">Strong demand – both from local and interstate buyers – coupled with low levels of stock available on the market, continued to be Perth’s recipe for growth in April. </span></p> <p><span style="font-weight: 400;">SQM Research’s latest data showed total residential listings rose by 4.5 per cent over the month, from 21,411 in March to 22,373 in April. </span></p> <p><span style="font-weight: 400;">Despite the monthly gain, the annual trend showed listings in the city are down by 0.4 per cent from 25,314 in April 2021. </span></p> <p><span style="font-weight: 400;">New listings (or properties that have been on the market less than 30 days) rose by a mere 0.8 per cent from 7,377 in March to 7,438  in April. Compared to April 2021, new listings in the city are up by 7.5 per cent. </span></p> <p><span style="font-weight: 400;"></span><span style="font-weight: 400;">Meanwhile, data showed that old listings or property listings over 180 days rose by 2.7 per cent from 3,788 in March to 3,889 in April. Year on year, old housing stock in Perth has declined by 26.2 per cent, indicating strong absorption rates in the West Australian capital. </span></p> <p><span style="font-weight: 400;">According to CoreLogic’s director of research Tim Lawless, persistently low levels of property listings help to explain the strength across the smaller capitals and regional markets.</span></p> <p><span style="font-weight: 400;">“The cities where housing values are rising more rapidly continue to show a clear lack of available properties to purchase,” the expert said. </span></p> <p><span style="font-weight: 400;">He stated this is the case for cities such as Perth, where total residential listings are 4.3 per cent lower than the same period a year ago. </span></p> <p><span style="font-weight: 400;">This observation is backed by REIWA’s data, which showed there were 7,920 properties for sale in the city at the end of April. </span></p> <p><span style="font-weight: 400;">The figures are 1 per cent higher than March and 11 per cent lower than the end of April 2021.</span></p> <p><span style="font-weight: 400;">“Listings for sale remain low across Perth, which is fuelling competition amongst buyers and putting upward pressure on prices. We expect to see more properties come to market as interest rates rise, but not enough to dampen demand,” Mr Collins said.</span></p> <p><span style="font-weight: 400;">In a show of strong demand, the median time to sell a house during April was 13 days, which is one day faster than March 2022 and the same as April 2021.</span></p> <p><span style="font-weight: 400;">“Median selling times in Perth are back below two weeks which is exceptionally fast. In this market, buyers must be very prepared and willing to act quickly when they see a property they want to purchase,” Mr Collins said.</span></p> <p><span style="font-weight: 400;">The fastest-selling suburbs in April were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6168/cooloongup>Cooloongup</a> (six days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6065/tapping>Tapping</a> (seven days), Waikiki (seven days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6026/woodvale>Woodvale</a> (seven days) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6052/bedford>Bedford</a> (seven days).</span></p> <p><span style="font-weight: 400;">Other suburbs to record fast median selling times were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6163/coolbellup>Coolbellup</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6028/currambine>Currambine</a>, Brabham, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6027/heathridge>Heathridge</a> and <span class='b-autolinkshadowbox'>Bayswater<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/wa/6053/bayswater>Bayswater, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/vic/3153/bayswater>Bayswater, VIC</a></span></span>. </span></p> <p><b>Auction markets</b></p> <p><span style="font-weight: 400;">Data from CoreLogic showed that over April, a total of 64 properties went under the hammer in Perth, with a final average clearance rate of 52.6 per cent.</span></p> <p><span style="font-weight: 400;">If you want to be in the loop about what’s happening across auction markets in the country, follow our weekly updates in our</span><a href="https://www.smartpropertyinvestment.com.au/news" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;"> News section</span></a><span style="font-weight: 400;">.  </span></p> <p><b>Vacancy rates </b> </p> <p><span style="font-weight: 400;">Domain’s data showed Perth’s rental market saw an increase in vacancy rates over the month but still remained low, indicating that tenants are still having a hard time finding an available rental space. </span></p> <p><span style="font-weight: 400;">According to the latest data, the city’s vacancy rate stood at 0.6 per cent in April, up by 0.1 basis point from March. </span></p> <p><span style="font-weight: 400;">The areas with the highest vacancy rates across Perth were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6011/cottesloe>Cottesloe</a> – <span class='b-autolinkshadowbox'>Claremont<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/tas/7011/claremont>Claremont, TAS</a> <a href=https://www.smartpropertyinvestment.com.au/data/wa/6010/claremont>Claremont, WA</a></span></span> (1.3 per cent), Perth City (1.1 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6160/fremantle>Fremantle</a> (1 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6210/mandurah>Mandurah</a> (1 per cent), and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6156/melville>Melville</a> (0.8 per cent). </span></p> <p><span style="font-weight: 400;">Meanwhile, the suburbs of Kwinana, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6073/mundaring>Mundaring</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6076/kalamunda>Kalamunda</a>, and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6110/gosnells>Gosnells</a> had the lowest vacancy rate of 0.3 per cent, while <a href=https://www.smartpropertyinvestment.com.au/data/wa/6168/rockingham>Rockingham</a> recorded a rate of 0.4 per cent. </span></p> <p><span style="font-weight: 400;">According to Domain, the number of vacant rental listings in Perth increased over the month across most of the capital cities after recording their lowest levels last month. </span></p> <p><span style="font-weight: 400;">Despite the increase, Domain noted rental stock still remains low annually and compared to March 2020 (except <a href=https://www.smartpropertyinvestment.com.au/data/vic/3000/melbourne>Melbourne</a>), continuing the recovery post-COVID.</span></p> <p><span style="font-weight: 400;">REIWA’s data showed there were 2,446 Perth properties for rent at the end of April, which is 3 per cent more than at the end of March but 14 per cent lower than the same time last year.</span></p> <p><span style="font-weight: 400;">Mr Collins acknowledged that a shortage in available rental listings remains a “significant challenge” for Perth’s rental market and that there is no easy resolution for the issue. </span></p> <p><span style="font-weight: 400;">“There is no quick solution for this problem, which is why it is imperative that the WA government does not make major changes to the <em>Residential Tenancies Act</em> that will discourage property investment in WA at a time when we desperately need more rental stock,” Mr Collins said. </span></p> <p><b>Rental market</b></p> <p><span style="font-weight: 400;">REIWA’s data showed Perth’s weekly rent price averaged $460 in April, indicating an increase of $10 over the month. </span></p> <p><span style="font-weight: 400;">This marks the first time average weekly rental prices rose in 2022 and is the highest median rent price the city has recorded. </span></p> <p><span style="font-weight: 400;">But Mr Collins noted that while rent prices are at a record high, it has been seven years since the city saw a new rental peak price. </span></p> <p><span style="font-weight: 400;">He added that while there have been alarm bells ringing over a rental crisis across the country in recent months, Perth is still a good option for those looking for a bang for their rental buck. </span></p> <p><span style="font-weight: 400;">“While it has been a challenging time for tenants, we still have the most affordable rental market in the country,” Mr Collins said.</span></p> <p><span style="font-weight: 400;">The suburbs to record the biggest increase in median rent during April were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6107/wilson>Wilson</a> (up $18 to $438 per week), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6110/southern-river>Southern River</a> (up $20 to $500 per week), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6050/mount-lawley>Mount Lawley</a> (up $25 to $625 per week), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6164/hammond-park>Hammond Park</a> (up $13 to $473) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6169/warnbro>Warnbro</a> (up $10 to $390 per week).</span></p> <p><span style="font-weight: 400;">Other suburbs to record notable increases were <span class='b-autolinkshadowbox'>Scarborough<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/wa/6019/scarborough>Scarborough, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4020/scarborough>Scarborough, QLD</a></span></span>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6100/victoria-park>Victoria Park</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6155/canning-vale>Canning Vale</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6170/wellard>Wellard</a> and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6058/forrestfield>Forrestfield</a>.</span></p> <p><span style="font-weight: 400;">In terms of leasing time, it took a median of 16 days for a vacant rental property to be taken off the market during April, which was the same as March and three days faster than April 2021.</span></p> <p><span style="font-weight: 400;">The suburbs that recorded the fastest median leasing times during March were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6163/hamilton-hill>Hamilton Hill</a> (12 days), Hammond Park (13 days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6038/alkimos>Alkimos</a> (13 days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6036/butler>Butler</a> (13 days) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6030/clarkson>Clarkson</a> (13 days).</span></p> <p><span style="font-weight: 400;">Other suburbs to experience fast median leasing times were Success, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6155/willetton>Willetton</a>, Harrisdale, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6163/spearwood>Spearwood</a> and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6122/byford>Byford</a>.</span></p> <p><span style="font-weight: 400;">CoreLogic’s data showed that rents for houses and units rose by 6.4 per cent and 5.4 per cent over the year. </span></p> <p><span style="font-weight: 400;">Meanwhile, the gross rental yield in the city stood at 4.4 per cent in April, the highest of all capital markets. </span></p> <p><span style="font-weight: 400;">Ms Owen predicts the city’s high gross rental yield may cause a short-term increase in demand from the investor segment.</span></p> <p><span style="font-weight: 400;">“The city arguably has better prospects for medium-term capital gains, and a low buy-in price,” she said.</span></p> <p><span style="font-weight: 400;">“Lending indicators data from the ABS show investors currently comprise only 25.7 per cent of mortgage demand in WA, well below the national average of 35.2 per cent and the second-lowest proportion of investment activity across the states and territories after Darwin,” Ms Owen added. </span></p> <p><span style="font-weight: 400;"></span><b>Where to next for Perth’s market? </b></p> <p><span style="font-weight: 400;">Despite Perth’s strong showing so far in 2022, Ms Owen warned that Perth is not immune to the same economic conditions that threaten to claw back much of the gains made in the housing market last year.</span></p> <p><span style="font-weight: 400;">Ms Owen added that while several tailwinds may provide more fuel for the Perth market’s growth, further monetary policy tightening may be a “blunt force for housing demand”.</span></p> <p><span style="font-weight: 400;">“Perth may eventually follow other Australian markets into a broad-based downswing as a result, just as record-low interest rates aided the recent recovery,” she warned. </span></p> <p><span style="font-weight: 400;">The RBA also tempered expectations of further growth in dwelling values for the rest of the year, stating in its latest </span><a href="https://www.rba.gov.au/publications/fsr/2022/apr/pdf/financial-stability-review-2022-04.pdf" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">Financial Stability Review</span></a><span style="font-weight: 400;"> that said both banks and borrowers needed to consider the potential for a drastic drop in property prices.</span></p> <p><span style="font-weight: 400;">“After </span><a href="https://www.smartpropertyinvestment.com.au/research/23344-is-2021-s-property-price-growth-unprecedented" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">nationwide housing prices increased by 22 per cent over 2021 </span></a><span style="font-weight: 400;">(the strongest annual growth rate since the late 1980s), the pace of housing price growth moderated in most markets in early 2022,” the review said.</span></p> <p><span style="font-weight: 400;">“Future increases in interest rates could also weigh on housing and other asset prices,” the central bank added. </span></p> <p><span style="font-weight: 400;">The Reserve Bank also cited the historical relationship between interest rate rises, as well supply and demand factors, and estimated a major fall in property prices could be on the horizon.</span></p> <p><span style="font-weight: 400;">“A 200 basis point increase in interest rates from current levels would lower real housing prices by around 15 per cent over a two-year period,” the RBA forecast. </span></p> <p><span style="font-weight: 400;">Meanwhile, local experts remain optimistic about Perth’s growth prospects, with Mr Collins expressing his confidence that the city is still positioned for further gains. </span></p> <p><span style="font-weight: 400;">“WA’s affordable housing and strong economy mean that most property owners and buyers are in a good position to be able to afford price increases and manage interest rate rises,” he stated. </span></p> <p><i><span style="font-weight: 400;">For more industry expert insights on the property market, check out our amazing </span></i><a href="https://www.smartpropertyinvestment.com.au/podcasts"><i><span style="font-weight: 400;">podcasts</span></i></a><i><span style="font-weight: 400;">. Also, make sure to check our </span></i><a href="https://www.smartpropertyinvestment.com.au/news"><i><span style="font-weight: 400;">News section</span></i></a><i><span style="font-weight: 400;"> for the latest property market reports, insights, news and useful tips and strategies for investors. </span></i></p><style>.b-glossaryTitle { padding: 0 0 5px 0;font: normal normal bold 16px/25px Poppins;letter-spacing: 0px;color: #000000;text-transform: uppercase;opacity: 1;text-align: left;border-bottom: 1px solid #d7d7d7;} .b-glossaryTerm { text-decoration: none !important;text-align: left;font: normal normal bold 16px/23px Poppins;letter-spacing: 0px;color: #EA5A1F !important;opacity: 1; }.b-glossaryDef {text-align: left;font: normal normal normal 16px/23px Questrial;letter-spacing: 0px;color: #000000;opacity: 1;}</style><div style="background-color:#FFFCFA;"><h2 class="b-glossaryTitle">RELATED TERMS</h2><div style="margin-bottom:5px;"><a class="b-glossaryTerm">Property</a><p class="b-glossaryDef">Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.</p></div></div><style>.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }</style>