Tight supply and expensive build costs are putting upward pressure on property prices across regional Western Australia.
According to the Real Estate Institute of Western Australia (REIWA), property prices grew across most of WA’s major regional cities, led by Albany, with a 2.6 per cent rise to the median house sale price in the past three months.
REIWA President Joe White said well-presented homes priced to meet the market were selling extremely quickly and attracting multiple offers.
“Our members tell us buyers are mainly Albany locals, with a lot of property owners looking to upgrade,” Mr White said.
“There is particularly strong interest in premium residential and lifestyle properties around $1 million, with all enquiries for a recent near-$3 million listing in Middleton Beach coming from local buyers so far.”
Mr White said Albany, like a lot of regional centres, was also affected by the increasing costs and significant delays of building a home.
“Our members report people are changing direction; they may have been looking to build or extend, but are buying a near-new property instead,” he said.
“It’s a trend in Perth, but more so in the regions where it is even harder to get tradespeople and more expensive to build.”
Seven regional centres recorded price growth over the quarter, with two remaining stable.
Esperance was the second top performer with its median house sale price rising 2.5 per cent to $410,000.
Busselton again led the way annually, recording 14.2 per cent median house price growth, with Albany the next best performer with 9.9 per cent growth over the year.
Mr White said that the rate of price growth had been slowing across WA.
“Like Perth, regional markets are holding firm in the face of numerous interest rate rises,” he said.
“Buyers have adjusted their budgets and expectations.
“They are seeking value, and sellers who price their properties to meet the market are selling in reasonable timeframes”.
In better news for tenants, rents have started to fall in some of the regional cities.
Rents fell in Busselton (down 1.6 per cent), and Port Hedland (down 5.6 per cent) while they remained flat in Kalgoorlie.
Albany again saw the most growth, with the median weekly rent rising 15.4 per cent during the quarter.
“The rental market remains very tight in Albany,” Mr White said.
“It’s a problem of supply.
“Our members say there hasn’t been an increase in the number of properties available for rent in Albany.”
Mr White said investors have been selling and not many have been buying over the past year.
“It’s a problem seen across most of the state and the lack of supply, coupled with strong demand is pushing rent prices up,” he said.
“There is a lot of debate about rental reforms at the moment, but the big question for assessing housing policy in this market is whether it will increase the amount of homes that can be built, bought or rented.
“The feedback from investors is that proposed rental reforms won’t do that and will in fact have the opposite result.
“This would just add to the woes tenants are facing currently.”