Perth house prices on track to surpass 2014 peak

May 14, 2021

Perth house prices on track to surpass 2014 peak

May 14, 2021
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Perth house prices have reached their highest level in just over five years and are on track for a new record if back-to-back quarterly price growth continues this year, new data shows.

Median house prices in Perth are now $578,612 after rising 2.4 per cent during the March quarter, marking a fourth consecutive quarter of price growth, according to the latest Domain House Price Report, released on Thursday.

In the 12 months to March, Perth house prices grew 9.2 per cent.

“It is clear Perth’s housing market has moved into another price cycle, now roughly one year into a recovery following a five-year downturn,” Domain senior research analyst Nicola Powell said.

“Units notched a third consecutive quarter of growth, up 3.9 per cent ($371,445). This uninterrupted run of price growth has not occurred since 2013 in the lead-up to the previous price peak reached in 2014.

“Houses remain $37,000 lower and units $50,000 lower than the 2014 record highs, with the price gap rapidly closing.”

Real Estate Institute of WA president Damian Collins said price growth in some areas had felt more like 10 per cent during the last three to six months.

“It’s a market where we have got low supply,” he said. “We have got 8600 properties for sale, according to REIWA stats. In a normal, balanced market, it is about 13,000.

“So, with interest rates so low and the returning expats – which is where a lot of the demand is coming from – and also people renting now thinking it’s cheaper to buy than rent, which it is, I think we are going to peak that previous price peak this year.”

Realmark Coastal director Nathan Burbridge said the market was in an undersupply stage where almost all homes received two to five offers, with every home type being snapped up.

“The home opens have always been the barometer of the marketplace,” he said. “It’s now commonplace to have 30 to 80 plus groups through an open, which is a clear sign that there’s not enough homes on the market to satisfy demand.

“This will obviously always lead to more competition and therefore multiple offers across virtually all of our homes. Having an individual ‘negotiation’ with a buyer and seller with the back and forth is now a thing of the past. It’s moved to a buyer versus buyer market, removing the sellers from the negotiation table altogether.”

Property analyst and valuer Gavin Hegney said the Perth property market was still in a catch-up phase and had yet to hit all-time price highs.

Perth house prices have reached their highest level in just over five years and are on track for a new record if back-to-back quarterly price growth continues this year, new data shows.

Median house prices in Perth are now $578,612 after rising 2.4 per cent during the March quarter, marking a fourth consecutive quarter of price growth, according to the latest Domain House Price Report, released on Thursday.

In the 12 months to March, Perth house prices grew 9.2 per cent.

“It is clear Perth’s housing market has moved into another price cycle, now roughly one year into a recovery following a five-year downturn,” Domain senior research analyst Nicola Powell said.

“Units notched a third consecutive quarter of growth, up 3.9 per cent ($371,445). This uninterrupted run of price growth has not occurred since 2013 in the lead-up to the previous price peak reached in 2014.

“Houses remain $37,000 lower and units $50,000 lower than the 2014 record highs, with the price gap rapidly closing.”

Real Estate Institute of WA president Damian Collins said price growth in some areas had felt more like 10 per cent during the last three to six months.

“It’s a market where we have got low supply,” he said. “We have got 8600 properties for sale, according to REIWA stats. In a normal, balanced market, it is about 13,000.

“So, with interest rates so low and the returning expats – which is where a lot of the demand is coming from – and also people renting now thinking it’s cheaper to buy than rent, which it is, I think we are going to peak that previous price peak this year.”

Realmark Coastal director Nathan Burbridge said the market was in an undersupply stage where almost all homes received two to five offers, with every home type being snapped up.

“The home opens have always been the barometer of the marketplace,” he said. “It’s now commonplace to have 30 to 80 plus groups through an open, which is a clear sign that there’s not enough homes on the market to satisfy demand.

“This will obviously always lead to more competition and therefore multiple offers across virtually all of our homes. Having an individual ‘negotiation’ with a buyer and seller with the back and forth is now a thing of the past. It’s moved to a buyer versus buyer market, removing the sellers from the negotiation table altogether.”

Property analyst and valuer Gavin Hegney said the Perth property market was still in a catch-up phase and had yet to hit all-time price highs.

“We still haven’t caught up to 2014 prices, and yet our market is experiencing boom-time conditions in many areas, which probably just shows perhaps we are still moving through the undervalued territory if we aren’t even in overvalued territory yet,” he said.

“And, you could argue, on the way through we have to hit fair value lines and perhaps we haven’t even hit the fair value line yet. So really, even though its boom-like conditions, booms aren’t really booms until we get to all-time high prices, which we haven’t even reached yet.”

Dr Powell said house prices were consistently rising across all price segments – entry, middle and upper.

“So I think what it says is we’ve got a varied buyer active in the market because of various incentives,” she said. “We’ve got all buyers being supported by low interest rates but I there would be an element of urgency now because buyers are realising that prices are rising.”

Dr Powell said border closures had impacted Perth, given the number of interstate workers who would have chosen to relocate during the pandemic.

“Those from the eastern states would have found prices affordable in comparison, as would expats returning from overseas cities with far higher home prices,” she said.

“As a result, transactions in Perth are back to transaction volumes last seen back in 2014. Now that the state government rental moratorium on evictions and rental hikes has ceased, investor participation is likely to continue to rise.”

Source: Domain.com.au