<p><span style="font-weight: 400;"><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> is proving to be a break-out star among capital markets this year, as the West Australian capital delivered solid gains over May and closed out Autumn on a solid footing. </span></p>
<p><span style="font-weight: 400;">Real Estate Institute of Western Australia (REIWA) president Damian Collins stated that the city’s market conditions during the first five months of 2022 had been strong, with the Perth property market outperforming <a href=https://www.smartpropertyinvestment.com.au/data/nsw/2000/sydney>Sydney</a> and <a href=https://www.smartpropertyinvestment.com.au/data/vic/3000/melbourne>Melbourne</a> for price growth. </span></p>
<p><span style="font-weight: 400;"></span><span style="font-weight: 400;">“May was another solid month of growth for the Perth property market, which is an encouraging sign that the recent increase to the cash rate has not stifled demand,” Mr Collins said. </span></p>
<p><span style="font-weight: 400;">The city’s continued growth streak comes as bigger cities grapple with declining growth, stemming from a detrimental mix of poor affordability in housing markets, rising mortgage rates, a glut in listings, a change in spending away from housing and a decline in home buyer confidence. </span></p><div class="dfp-ticker interscroller f" data-catid="85" data-pcount1="91">
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<p><span style="font-weight: 400;">The recent move by the Reserve Bank of Australia to lift the cash rate from its current rate of 0.35 per cent to 0.85 per cent during its </span><a href="https://www.smartpropertyinvestment.com.au/finance/23819-rba-reveals-june-cash-rate-decision" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">June meeting</span></a><span style="font-weight: 400;"> also caused most economists to reinforce their forecasts that steep declines in prices are inevitable this year, bringing on weaker demand. </span> </p>
<p><span style="font-weight: 400;">But according to Mr Collins, REIWA has not observed any slowdown from the interest rate rise so far. </span></p>
<p><span style="font-weight: 400;">“In fact, we have seen the opposite, with more people making a decision to buy before rates rise further,” he commented. </span></p>
<p>Mr Collins highlighted that Perth’s strength continued to be underpinned by the strong demand and supply dynamics in the market, which dulled down the impact of softening market conditions on property prices.</p>
<p><span style="font-weight: 400;">“Based on what we’ve seen so far this year, Perth is on track to achieve REIWA’s forecasted 10 per cent price growth by the end of the year,” Mr Collins said.</span></p>
<p><span style="font-weight: 400;">He further forecast that a housing shortage would keep Perth on track for double-digit price growth this year.</span></p>
<p><span style="font-weight: 400;">The local expert pointed out that Perth already had a shortage of 8,000 homes by the end of May, which was partly responsible for the rental crisis.</span></p>
<p><span style="font-weight: 400;">He forecast a shortage of 20,000 homes within four years, based on the slow rate of construction and the state government’s forecast population growth.</span></p>
<p><span style="font-weight: 400;">Mr Collins acknowledged that there are factors that could derail the city’s growth, but he remained steadfast in his belief that Perth will weather out any headwinds. </span></p>
<p><span style="font-weight: 400;">“Of course, anything can happen which could change sentiment, but we have a significant shortage of properties for sale and for rent and demand remains strong which will continue to translate to price growth,” he stated.</span></p>
<p><span style="font-weight: 400;">Will Perth continue to cut a strong figure amid weakening markets in the coming months? Or will the West Australian capital also feel the chill from the recent rate hikes come winter?</span></p>
<p><span style="font-weight: 400;">For now, let’s see how Perth’s market performed in May 2022.</span></p>
<p><b>Property values </b></p>
<p><span style="font-weight: 400;">CoreLogic’s latest data showed Perth’s growth streak continued in May, recording a 0.6 per cent over the month. </span></p>
<p><span style="font-weight: 400;">While the figures mark the fifth consecutive month of growth for the city, it is down from the 1.1 per cent increase recorded in April. </span></p>
<p><span style="font-weight: 400;">On a quarterly basis, property values in the West Australian capital are up by 2.7 per cent, up from the 2.4 per cent growth recorded in the previous rolling three-month period. </span></p>
<p><span style="font-weight: 400;">CoreLogic’s director of research Tim Lawless said that while Perth, along with <a href=https://www.smartpropertyinvestment.com.au/data/sa/5000/adelaide>Adelaide</a>, defied the major trend of declining quarterly growth among major capital cities, both regions remain below the peak quarterly rate of growth reached in May 2021. </span></p>
<p><span style="font-weight: 400;">“Since then, housing has been getting more unaffordable, households have become increasingly sensitive to higher interest rates as debt levels increased, savings have reduced and lending conditions have tightened,” he said. </span></p>
<p><span style="font-weight: 400;">“Now we are also seeing high inflation and a higher cost of debt flowing through to less housing demand,” he added. </span></p>
<p><span style="font-weight: 400;"></span><span style="font-weight: 400;">Compared to May 2021, the average price of a property in Perth is now up 5.6 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 $3,400 monthly increase in median dwelling prices, the city continues to be one of the most affordable places to buy a property. The city’s average price tag for a property is only higher than Darwin’s, where dwellings are sold with a median price tag of $504,306. </span></p>
<p><span style="font-weight: 400;">Diving deeper into the data, both the house and unit sectors grew strongly over the month — albeit at a slower compared to April’s pace. </span></p>
<p><span style="font-weight: 400;">Median values for houses in the city grew 0.8 per cent in May, slowing down from the 1.2 per cent gain seen in April.</span></p>
<p><span style="font-weight: 400;">This brought the city’s annual growth to 5.9 per cent, with the average price of a house in Perth now at $582,550 — representing an increase of almost $3,800 month on month. </span></p>
<p><span style="font-weight: 400;">Meanwhile, the city’s unit market posted a 0.7 per cent monthly increase, speeding up from the meagre 0.3 per cent gain recorded in April. </span></p>
<p><span style="font-weight: 400;">On an annual basis, the median price of a unit in Perth is up 3.6 per cent, with the average price tag of an apartment in the West Australian capital at $410,850. This indicates a growth of $1,100 in the sector’s median price. </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;">Mr Collins revealed that 64 Perth suburbs recorded price growth during the month, indicating strong market regions across the city. </span></p>
<p><span style="font-weight: 400;">But he added: “Despite the fact [that] prices are rising, Perth continues to have the most affordable median house sale price of any capital city in the country.”</span></p>
<p><span style="font-weight: 400;">The suburbs to record the biggest increase in median house sale price during the period were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6006/north-perth>North Perth</a> (up 4.5 per cent to $1.1 million), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6019/wembley-downs>Wembley Downs</a> (up 2.7 per cent to $1.31 million), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6147/langford>Langford</a> (up 2.6 per cent to $380,000), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6107/wilson>Wilson</a> (up 2.5 per cent to $610,000) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6052/bedford>Bedford</a> (up 2.3 per cent to $750,000).</span></p>
<p><span style="font-weight: 400;">Other suburbs to perform well in May were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6210/meadow-springs>Meadow Springs</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6035/yanchep>Yanchep</a>, Brabham, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6163/kardinya>Kardinya</a> and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6156/attadale>Attadale</a>.</span></p>
<p><b>Supply and demand</b></p>
<p><span style="font-weight: 400;">Despite Perth recording a rise in listings in May, Mr Collins said that the market is far from being in a state of balance as the city continues to grapple with a supply shortage. </span></p>
<p><span style="font-weight: 400;">REIWA reported a total of 8,519 Perth properties had a “for sale” sign at the end of April, which is 6 per cent higher than April and 11 per cent lower than the end of May 2021.</span></p>
<p><span style="font-weight: 400;">“We saw a notable increase in listings for sale during May, which is pleasing, however, stock levels remain well below the 12,000 to 13,000 figure that we’d expect to see in a balanced market,” Mr Collins said.</span></p>
<p><span style="font-weight: 400;">Data from SQM Research supported this observation, which showed that total residential property listings in the West Australian capital fell by 2.5 per cent month on month from 22,373 in April to 21,809 in May. </span></p>
<p><span style="font-weight: 400;">Compared to May 2021, the number of available stock in the city is down by 1.2 per cent. </span></p>
<p><span style="font-weight: 400;">New listings (or properties that have been on the market less than 30 days) in Perth rose by 0.5 per cent from 7,438 in April to 7,473 in May. Compared to the same period last year, new listings in the city are also up by 4.9 per cent. </span></p>
<p><span style="font-weight: 400;">Data showed that old listings or property listings over 180 days also rose by 3.4 per cent from 3,889 in April to 4,023 in May. On an annual basis, old housing stock in the city is down by 15.3 per cent. </span></p>
<p><span style="font-weight: 400;">Looking at the bigger picture, CoreLogic data showed that Perth’s total advertised stock level was 34.7 per cent below the five-year average in May. </span></p>
<p><span style="font-weight: 400;">Despite the low numbers of properties available, Mr Collins said sales volumes were up and consistently reaching around 1,000 properties a week.</span></p>
<p><span style="font-weight: 400;">“These are quite solid numbers,” he said. “In 2018 and 2019, it was regularly 600 properties a week, we are seeing not much stock available.” </span></p>
<p><span style="font-weight: 400;">He added that the shortage in supply has also led Perth properties to sell like hotcakes over the month. “As soon as anything good comes to market, it sells very quickly,” he said.</span></p>
<p><span style="font-weight: 400;">The median time to sell a house was 13 days during May, which is the same amount of time as April and one day faster than May 2021.</span></p>
<p><span style="font-weight: 400;">“Properties continue to sell fast. Perth is firmly in a seller’s market and buyers need to ensure they act quickly and present their best offers first to avoid missing out,” Mr Collins said.</span></p>
<p><span style="font-weight: 400;">Data showed the fastest-selling suburbs in May were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6168/cooloongup>Cooloongup</a> (six days), Bedford (seven days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6027/heathridge>Heathridge</a> (seven days), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6156/melville>Melville</a> (seven days) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6169/waikiki>Waikiki</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/6026/woodvale>Woodvale</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6026/kingsley>Kingsley</a>, Piara Waters, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6036/butler>Butler</a> and Camillo.</span></p>
<p><span style="font-weight: 400;">In terms of sales, REIWA reported on 31 May that turnover volume was up 15 per cent on a monthly basis and 4.1 per cent higher over the year. </span></p>
<p><span style="font-weight: 400;"></span><b>Auction markets</b></p>
<p><span style="font-weight: 400;">Data from CoreLogic showed that over May, a total of 70 properties went under the hammer in Perth, with a final average clearance rate of 43 per cent. Last month, the number of properties sold under the hammer came in at 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;">Perth’s rental crisis worsened in May, as rental listings in the city remained scarce for prospective tenants over the month. </span></p>
<p><span style="font-weight: 400;">According to REIWA, there were 2,322 properties for rent in the city at the end of May, which is 7 per cent less than at the end of April and 18 per cent less than at the end of May 2021.</span></p>
<p><span style="font-weight: 400;">“The rental shortage will not go away without a significant uplift in private investment. We need to ensure property investment is encouraged in Western Australia so that there are enough available rentals to keep up with tenant demand,” Mr Collins said. </span></p>
<p><span style="font-weight: 400;">REIWA also revealed there were </span><a href="https://www.smartpropertyinvestment.com.au/buying/23854-investors-wanted-12-perth-suburbs-in-dire-need-of-rental-supply" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">12 Perth suburbs with just one rental up for grabs at the end of last month</span></a><span style="font-weight: 400;">, prompting the state’s peak real estate body to call on investors to help inject the market with additional supply. </span></p>
<p><span style="font-weight: 400;">“There is an urgent need for more investors in WA, with fewer than 2,500 properties available for rent in Perth and vacancy rates across the state remaining at or near record lows,” he stated. </span></p>
<p><span style="font-weight: 400;">Separate data from Domain showed the city’s vacancy rate stood at 0.6 per cent in May. Despite the figures being unchanged from last month, the figures indicate that tenants are doing it tough in the city. </span></p>
<p><span style="font-weight: 400;">In terms of supply, Perth’s vacant rental listings fell by 4.1 per cent month on month to just above 1,000.</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), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6160/fremantle>Fremantle</a> (1.3 per cent), Perth City (1.2 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6210/mandurah>Mandurah</a> (0.7 per cent), and Melville (0.6 per cent). </span></p>
<p><span style="font-weight: 400;">Meanwhile the suburbs of Kwinana (0.1 per cent), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6110/gosnells>Gosnells</a> (0.3), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6076/kalamunda>Kalamunda</a> (0.3 per cent), <span class='b-autolinkshadowbox'>Armadale<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/wa/6112/armadale>Armadale, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/vic/3143/armadale>Armadale, VIC</a></span></span> (0.3 per cent) and <a href=https://www.smartpropertyinvestment.com.au/data/sa/5440/cockburn>Cockburn</a> (0.3 per cent). </span></p>
<p><span style="font-weight: 400;"></span><b>Rental market</b></p>
<p><span style="font-weight: 400;">In a further sign that Perth’s rental market is red hot, REIWA’s data showed Perth’s weekly rent price averaged $470 in May — indicating an increase of $10 over the month. This marks the second time average weekly rental prices rose during the year. </span></p>
<p><span style="font-weight: 400;">While the current rental market conditions are challenging for tenants, Mr Collins stated that Perth “continues to have the most affordable rental environment in the country”. </span></p>
<p><span style="font-weight: 400;">The suburbs to record the biggest increase in median rent during May were <span class='b-autolinkshadowbox'>Como<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/nsw/2226/como>Como, NSW</a> <a href=https://www.smartpropertyinvestment.com.au/data/wa/6152/como>Como, WA</a></span></span> (up $40 to $545 per week), Butler (up $15 to $420 per week), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6059/dianella>Dianella</a> (up $15 to $465 per week), <a href=https://www.smartpropertyinvestment.com.au/data/wa/6173/secret-harbour>Secret Harbour</a> (up $15 to $475 per week) and Armadale (up $10 to $350 per week).</span></p>
<p><span style="font-weight: 400;">Other suburbs to record notable rent price hikes were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6056/midland>Midland</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6064/girrawheen>Girrawheen</a>, Waikiki, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6108/thornlie>Thornlie</a> and <span class='b-autolinkshadowbox'>Belmont<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/qld/4153/belmont>Belmont, QLD</a> <a href=https://www.smartpropertyinvestment.com.au/data/vic/3216/belmont>Belmont, VIC</a> <a href=https://www.smartpropertyinvestment.com.au/data/nsw/2280/belmont>Belmont, NSW</a> <a href=https://www.smartpropertyinvestment.com.au/data/wa/6104/belmont>Belmont, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/qld/4153/belmont>Belmont, QLD</a></span></span>.</span></p>
<p><span style="font-weight: 400;">In terms of leasing time, it took a median of 16 days to lease a rental during May, which was the same as April and two days faster than May 2021.</span></p>
<p><span style="font-weight: 400;">The suburbs where “for rent” signs were quickly overturned were <a href=https://www.smartpropertyinvestment.com.au/data/wa/6112/seville-grove>Seville Grove</a> (10 days), Harrisdale (12 days), Butler (12 days), Success (12 days) and <a href=https://www.smartpropertyinvestment.com.au/data/wa/6038/alkimos>Alkimos</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 in Perth rose by 6.6 per cent and 5.3 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 May, unchanged from the previous month. </span></p>
<p><b>Outlook for Perth’s market </b></p>
<p><span style="font-weight: 400;">With the RBA set to steadily raise the cash rate through the rest of the year and into 2023, most market experts predict a sharp decline in price growth across the country. </span></p>
<p><span style="font-weight: 400;">But for Mr Collins, things are still looking up for Perth, as current market conditions are seen to set up the city for further growth. </span></p>
<p><span style="font-weight: 400;">He enumerated that an expected surge in migration with the easing of borders, the city’s strong economic position, as well as Perth’s relative affordability compared to other markets, will continue to drive up prices in the coming months. </span></p>
<p><span style="font-weight: 400;"></span><span style="font-weight: 400;">“At some stage this year, we will start to see more migrants coming in for jobs,” Mr Collins said.</span></p>
<p><span style="font-weight: 400;">“Although it is going to be harder to get people here than it used to be, this population growth will continue to fuel demand.”</span></p>
<p><span style="font-weight: 400;">Mr Collins also cited that Western Australia is the cheapest state in the country for housing — around 25 to 30 per cent lower than Brisbane and Melbourne and 15 per cent lower than Adelaide. </span></p>
<p><span style="font-weight: 400;">“Our national body does affordability studies, and the last report stated that in WA an average 26.2 per cent of income goes on a mortgage,” he said.</span></p>
<p><span style="font-weight: 400;">Domain’s latest </span><i><span style="font-weight: 400;">First Home Buyer Report </span></i><span style="font-weight: 400;">also showed that Perth is still the best choice for home buyers looking the enter the market, even amid rising interest rates. </span></p>
<p><span style="font-weight: 400;"></span><span style="font-weight: 400;">Domain chief of research and economics Dr Nicola Powell explained: “Perth is the best city for first-home buyers, with the quickest savings time at three years and seven months for an entry house, less than half of the time taken in Sydney.”</span></p>
<p><span style="font-weight: 400;">Mr Collins said that with the way the year is unfolding, REIWA is still betting on the city to deliver double-digit growth this year. “We are forecasting the 2022 calendar year to grow 10 per cent, and that is looking to be on track,” he said.</span></p>
<p><span style="font-weight: 400;">Meanwhile, Mr Lawless predicts Perth housing prices will grow a further 3 to 5 per cent this year, on the back of 3.6 per cent growth so far since January.</span></p>
<p><span style="font-weight: 400;">The expert believes that Perth will be more insulated from the sharp downturns observed in Sydney and Melbourne. </span></p>
<p><span style="font-weight: 400;">“The fundamentals in Perth are very good, with its labour and jobs market, a strong economy, and the affordability of homes,” he said.</span></p>
<p><span style="font-weight: 400;">Data from the Australian Bureau of Statistics (ABS) showed that Western Australia’s unemployment rate is at an all-time low of 2.9 per cent, an economic trend that experts believe has underpinned demand in the city. </span></p>
<p><span style="font-weight: 400;">“Demand is coming up against really low supply levels, and this will keep a floor under the price,” Mr Lawless 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" target="_blank" rel="noopener noreferrer"><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" target="_blank" rel="noopener noreferrer"><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>