A growing number of Australians are deciding to relocate to Perth, lured in by the city’s affordable housing and strong economy.
However, a local buyer’s agent has warned the mass migration is putting sustained pressure on Perth’s property and rental market.
Data released by the Australian Bureau of Statistics shows Western Australia’s population grew by 1.3% in the 2021-22 financial year, the second-highest growth rate of all the states and territories, with almost four out of five of the state’s residents living in greater Perth.
Perth buyer’s agent Peter Gavalas (pictured above left) from Resolve Property Solutions said housing affordability remains a key issue that is causing many Australians to head west.
“Perth’s property market was one of only three capital cities to see growth over the 2022 calendar year, with CoreLogic’s home value index up by 3.6%,” Gavalas said. “Yet the city remains accessible to many first home buyers, with a median home value of $561,000 in December – about $450,000 less than Sydney.”
Perth defies trends in other state capitals
CoreLogic economist Kaytlin Ezzy (pictured above centre) said Perth bucked the trend seen across the other capitals in 2022 as house values rose 0.1% over the December quarter, taking values 3.9% higher over the year.
“Perth remains the most affordable capital city for detached homes, with a median house value of $586,721,” Ezzy said. “Meanwhile, Perth’s unit values have decreased by -1.2% over the three months to December, taking its median value to $406,621.”
Gavalas said Perth might be one of Australia’s most affordable capital cities, but workers in the city earned the highest median weekly salary of all state capitals at $1,305 per week.
“You’re paying less on your home loan while earning a great wage, so you should have plenty left over to make the most of every lifestyle opportunity available – whether that’s enjoying the city’s thriving restaurant and entertainment scene or the state’s many natural wonders,” Gavalas said.
“However, Perth is in the midst of a housing supply crunch that’s seen the vacancy rate drop to a record low of 0.3% as the shortage of available rental properties is putting upward pressure on rents, with the median weekly asking house rent soaring by 11.3% over 2022.”
Population boom affects property prices
Gavalas said Perth’s population boom was also starting to impact the property market, with the total number of properties advertised for sale dropping by 7.4% over 2022.
“I’m not surprised that Perth was only one of two capital cities to see a fall in total listing volumes over the year as properties are being snapped up quickly by both investors and relocators, particularly in the more affordable price brackets,” he said.
“It’s likely these strong conditions will continue, with Perth values forecast to rise up to 5% as reported by REIWA this calendar year, driven by interstate migration.”
Matthew Posselt (pictured above right) owner and senior broker of Elite Finance Australia, located in Perth’s CBD, said the slowdown of home values and property transactions experienced in the east was not being felt in the west.
“We still have a large amount of customers making offers on homes, only to find that they have missed out to a higher bidder,” Posselt said. “They then offer slightly more than the asking price for the next home hoping to be successful.”
Posselt said when it came to forecasting the west coast housing market in 2023, it was hard to say as the local market was very different to the east coast where most data was analysed.
“There are so many variables which could effect and sway the market in 2023,” he said. “Interest rates will continue to have some effect, however I believe the supply and demand of homes available in WA will ultimately control the market. While there continues to be a shortage of homes and rentals, I believe the market will probably continue to stay strong.”
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