Perth’s new median house price smashes record as new listings tank

Perth’s real estate market has continued its runaway growth in May recording year-on-year growth of more than 24 per cent for houses and 20 per cent for units.

The median house price in Perth now sits at an all-time high of $819,063, while listings are down 15 per cent in the 12 months to May 2024, according to data compiled by Ray White Group. This is a record across

Chief economist Nerida Conisbee said price growth trends were likely to be similar in coming months, given the big fall in the number of properties listed for sale.

“The drop in properties for sale seems to be concentrated in outer suburban areas,” she said.

“Baldivis still has a lot of listings, but has seen the biggest decline, with 419 fewer listings than April 2024.”

Listings have fallen significantly in suburbs popular with first-home buyers including Aveley, Banksia Grove, Byford and Dayton.

According to the Real Estate Institute of WA, new listings across the city are less than one-quarter of 2019 levels and homes were selling in just 8 days on average.

Further supporting values is strong interest from interstate and international investors with a new Momentum Wealth report confirming affordability and growth potential has placed Perth at the top of investor wish lists.

Managing director Damian Collins said more than 40 per cent of property investors named Perth as the best location to buy in 2024, overtaking Sydney and Melbourne.

“Past gains are no guide for the future, but there are compelling reasons to believe that Perth will continue to record high levels of property price growth, and a leading driver of this is affordability,” he said.

“The latest ANZ CoreLogic Affordability report shows that as of March 2024, it required 60 per cent of income to service a mortgage in Sydney, compared to 41 per cent in Perth.”

Collins said WA’s powerhouse economy had achieved 4.7 per cent growth in 2023, with forecast growth of around 3 per cent annually over the next four years.

“This is creating extensive job opportunities, which is underpinning high levels of interstate and overseas migration,” he said.

“From an investors’ perspective, this will fuel further demand for housing in Perth, where the vacancy rate is already at a record low.”

Conisbee said while Perth was less sensitive to interest rate changes, it was likely a cut would lead to further price increases.

“Inflation data released [Wednesday] shows that it’s not coming down quickly and the expected timing of a rate cut remains for early next year,” she said.

“It’s unlikely that speculation is driving up pricing – Perth is also seeing the strongest rental growth in Australia, so there are definite housing shortages that will take some time to resolve.”

While Perth has some of the cheapest real estate, Armadale in Perth’s south-eastern suburbs was one of the worst performers for mortgage arrears.

The analysis by S&P Global released on Wednesday found arrears rates were worst in the Northern Territory (1.22 per cent), followed by WA (1.18 per cent) and Victoria (1.13 per cent).

Armadale, where households had lower disposable incomes, making them more vulnerable to cost-of-living pressures, ranked the fourth-worst for arrears across Australia at 2.37 per cent.

Oxford Economics Australia senior economist Maree Kilroy said the latest ABS Building Approval data released on Thursday showed the rise in house prices was improving the household feasibility for new home construction in WA.

“WA is the only state recording sustained trend growth,” she said.

“Total dwelling approvals were up 2.7 per cent month-on-month. On a year ago, monthly house approvals are up 45 per cent; something no other states can say.

“This is consistent with the outperformance of this market on other metrics including price, rent and population growth.”

Conisbee said Melbourne had one of the weakest market conditions in the country with recent tax increases put in place for property owners in Victoria leading to an increase in properties coming to market, softening price growth.

Hobart was the only capital city to see a decline in prices over the month.

The Sydney market remains a strong performer despite continued affordability challenges in that city. Prices increased by 7.7 per cent over the year.

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