Perth’s median home price overtakes Melbourne’s

Demand for housing continues to outpace supply in Perth with the west continuing to lead the nation in home price gains.

Perth house values increased a further 2 per cent in August according to CoreLogic’s Home Value Index for August, taking growth to 24 per cent across the year.

Not enough homes are being built to house WA’s increasing population.Credit: Ross Swanborough

The median dwelling value in Perth ($785,250) and Adelaide ($790,800) has overtaken Melbourne ($776,044), making Perth’s median the fifth-highest among the capital city markets.

In August, Adelaide and Perth saw increases in the median dwelling value of $13,600 and $15,300 respectively, against a -$3,100 fall in the Melbourne median.

CoreLogic’s head of research, Eliza Owen, said it was the first time that Perth’s median dwelling value has been higher than Melbourne’s since February 2015, when the city was just coming off the highs of an iron-ore boom.

But she warned the high levels of growth in Perth would be difficult to sustain.

Owen said the ongoing outperformance of ‘cheaper’ markets showed demand was being deflected towards lower price points.

“Housing values cannot keep rising at the same pace in the mid-sized capitals of Perth, Adelaide and Brisbane when affordability is becoming increasingly stretched,” she said.

“Particularly in the context of elevated interest rates, loosening labour market conditions and cost of living pressures.”

The local government area of Kwinana recorded the biggest gains over the year, rising 31.4 per cent to a median of $638,651. It was closely followed by Gosnells ( up 29.7 per cent to $703,809), Armadale (up 29.4 per cent to $685,328) and Swan (up 29.2 per cent to $721,201).

Serpentine-Jarrahdale, Rockingham, Cockburn and Canning all recorded gains in the high 20s.

National home values increased 0.5 per cent in the month of August, representing the 19th consecutive month of increase in home values.

Capital growth across the cities remained diverse, with monthly gains led by Perth (2 per cent), followed by strong rises in Adelaide (1.4 per cent) and Brisbane (1.1 per cent), while Sydney recorded a mild 0.3 per cent.

Four capital cities saw declining values in August, Canberra (-0.4 per cent), Melbourne (-0.2 per cent), Darwin (-0.2 per cent), and Hobart (-0.1 per cent).

Ray White chief economist Nerida Conisbee said the volume of listing authorities - the point at which a vendor signs a Ray White agent to sell their home before the property was advertised - was strong in WA as we moved into spring.

“There are plenty of properties coming to market, which is great news for buyers,” she said.

Owen said there was still more demand for housing than available supply with total listings in Perth down on the five-year average by more than 40 per cent.

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