CoreLogic has announced a revision of its Perth home value index, confirming the Western Australian capital has seen an increase of 18.1 per cent above in the past 12 months.
CoreLogic noted the index correction pushed Perth’s annual price growth from 10.8 per cent as originally reported in July to 18.1 per cent in September.
REIWA President Damian Collins said the revised CoreLogic figures revealed the Perth price growth trajectory had performed even better than anticipated, which was welcome news for home owners and sellers.
“The turnaround of the WA market has been remarkably fast considering the downturn only hit rock bottom last year. We expect this recovery to continue throughout the remainder of 2021 and into 2022,” Mr Collins said.
Median house sale price
REIWA data showed Perth’s median house sale price was $520,000 in September, with 71 suburbs recording price growth during the month.
“It’s very encouraging that so many suburbs experienced price growth in September. The Perth market recovery is widespread and being felt across all price points and sub-markets,” Mr Collins said.
The suburbs to record the biggest price growth in September were Cooloongup (up 4.5 per cent to $320,000), Bicton (up 4 per cent to $1.25 million), City Beach (up 3.4 per cent to $2.175 million), Spearwood (up 3.4 per cent to $500,000) and Harrisdale (up 2.8 per cent to $530,000).
Other suburbs to perform well were Wanneroo, Forrestfield, Leda, Coolbellup, and Quinns Rock.
Listings for sale
There were 8368 properties for sale on reiwa.com at the end of September, which is 2 per cent more than at the end of August.
“With the spring selling season now underway, we’re seeing an increase in listing stock as more sellers come to market. We expect listing volumes will continue to grow in the coming months as more West Australians choose to take advantage of Perth’s strong price growth by listing their house for sale,” Mr Collins said.
Annually, listings for sale are 21 per cent lower than they were at the end of September 2020.
Time on market
The median time to sell a home in Perth during September was 17 days, which is one day faster than it took in August and 11 days faster than September 2020.
“Properties are still selling very quickly in Perth, which illustrates that competition amongst buyers to secure a property remains high,” Mr Collins said.
reiwa.com data shows the five fastest selling suburbs in September were City Beach (five days), Heathridge (six days), North Perth (six days), Kingsley (seven days), Ocean Reef (seven days).
Other suburbs to perform well were Willetton, Bull Creek, Coolbellup, Currambine and Kinross.
Median rent price
Perth’s median rent price has stabilised, holding at $430 per week in September.
“Despite the strong competition amongst tenants to secure a rental, median rent price growth has slowed in Perth, with the median rent unchanged over the month, and only up $5 on a quarterly basis,” Mr Collins said.
“WA is the most affordable place in the entire country to rent. It’s important that we actively encourage investment in WA to ensure we retain the most affordable rental environment in Australia,” Mr Collins said.
Median leasing times
It took a median of 18 days to lease a rental during September, which was one day faster than August and one day faster than September 2020.
The suburbs to record the fastest leasing times during September were Joondalup (11 days), Harrisdale (12 days), Thornlie (12 days), Kelmscott (13 days), and Clarkson (13 days).
Other suburbs to perform well were Halls Head, Piara Waters, Secret Harbour, Wanneroo, and Yokine.
Listings for rent
There were 2253 properties for rent on reiwa.com at the end of September.
“Perth’s rental shortage remains a problem for the WA rental market. Investors must remain an active part of the WA market so there are enough rentals to house tenants and keep rents affordable,” Mr Collins said.
“The outcome of the Residential Tenancies Act review, which is currently underway, needs to be fair for all parties. We must ensure investors aren’t disincentivised from buying in WA or this will have a knock-on effect to tenants further reducing stock and causing rents to rise.”
National housing values
The annual growth rate is now tracking at the fastest pace since the year ending June 1989.
The index rose 1.5 per cent in September, taking Australian housing values 17.6 per cent higher over the first nine months of the year and 20.3 per cent higher over the past 12 months.
The monthly change in housing values remains positive across every capital city and broad rest of state region, with Hobart (2.3 per cent) and Canberra (2 per cent) recording the largest growth.
Across regional Australia, regional NSW (2 per cent), regional Tasmania (1.7 per cent) and regional Queensland (1.7 per cent) led September’s capital gains.
Although growth conditions remain positive, it is becoming increasingly clear the housing market moved past its peak rate of growth in March when nationally dwelling values increased by 2.8 per cent.
Since that time, the monthly rate of growth has eased back to 1.5 per cent.
CoreLogic’s research director, Tim Lawless, explained the slowing growth conditions were the result of higher barriers to entry for non-home owners along with fewer government incentives to enter the market.
“With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers,” Mr Lawless said.
“Sydney is a prime example where the median house value is now just over $1.3 million. In order to raise a 20 per cent deposit, the typical Sydney house buyer would need around $262,300.
“Existing home owners looking to upgrade, downsize or move home may be less impacted as they have had the benefit of equity that has accrued as housing values surged.”
Mr Lawless went on to explain the slowdown in first home buyers can be seen in the lending data, where the number of owner occupier first home buyer loans has fallen by 20.5 per cent between January and July.
“Over the same period, the number of first home buyers taking out an investment housing loan has increased, albeit from a low base, by 45 per cent, suggesting more first home buyers are choosing to ‘rentvest’ as a way of getting their foot in the door,” Mr Lawless said.
Despite worsening affordability, house values are still generally rising faster than unit values; a trend that has been evident throughout most of the COVID period to-date, especially across the capital cities.
Hobart and Darwin are the only capital cities where this trend has not occurred, with unit values rising 5.4 percentage points and 4.8 percentage points more than house values respectively over the past 12 months.