Perth housing crisis nearing catastrophe with less than 2000 houses for sale

Housing demand in Perth continues to outpace supply with real estate pundits predicting the crisis gripping the city is set to worsen.

This time a year ago, when Perth was already in the midst of a housing crisis, there were a touch over 2300 houses, 1503 units and 1403 vacant blocks for sale – a total of 5257 properties.

Australian house prices have experienced some of the biggest increases in the developed world since the pandemic.Credit: Dion Georgopoulos

This week that figure has plummeted to 3285 comprising 1939 houses, 905 units and 441 vacant blocks.

Strategic Property Group managing director Trent Fleskens said the housing crisis was as critical as any time in recorded history.

“It’s been a five-year journey from the most oversupplied market in recorded history to the most undersupplied,” he said.

“The most concerning thing about this time around compared to the last boom is we just don’t have the supply capacity to solve this issue.

“Tradies have left the industry in droves over the last decade and we haven’t been replacing that trade base as we become a more tertiary society.”

Fleskens said unless we imported more trades from overseas and interstate there would be continued pressure on supply and prices for a sustained period.

“Currently, there is no light at the end of the tunnel for WA’s capacity to provide the housing its population requires.”

The numbers paint a grim picture. In a worrying sign for the besieged construction industry the number of apprentices starting in a trade has dropped sharply, down 17 per cent compared to the year earlier according to the latest HIA Trades Report.

In the past 12 months, new dwelling completions were 15,500, while the population increased by 94,000, resulting in severe undersupply conditions with six new arrivals per new dwelling built.

If an average household size of 2.5 is used, then almost 20,000 dwellings are under-supplied in the city over the past 12 months.

Australian Bureau of Statistics data released in July shows just more than 4200 new homes were completed in the March quarter, down from the previous two quarters. To keep pace with WA’s projected population growth of 1.4 per cent annually, 5750 completions are needed each quarter.

The lack of supply in the face of burgeoning demand propelled Perth house prices to a record high of $852,240 last month.

Local real estate agents said the residential property market was moving so fast almost all sales were advertised without a price guide, resulting in sale prices tens of thousands above the reserve.

Buyers agent Peter Gavalas predicted the housing crisis would worsen in the short term with the cost of building or renovating blowing out alongside the construction timeframes.

“In terms of properties on the market, we are regularly seeing seven to 10 offers on one property, the amount of buyers missing out keeps growing,” he said.

“When the next suitable property comes up for sale, they will be more aggressive as they won’t want to miss out again.

“This is going to continue to push up prices, especially in the affordable end of the market and upgraders.”

The inaugural 2024 State of Real Estate Report asked West Australians about their experience buying and selling property with more than 10 per cent admitting they struggled to find a home.

InfoTrack’s head of Property Australia Lee Bailie said 14 per cent of respondents named finding a property a top challenge, but the number one concern impacting 21 per cent of buyers was property prices.

“In the rush to snap up available homes, more buyers seem to be compromising on important property checks in favour of putting in a speedy offer,” he said.

“Not even half of all respondents (46 per cent) had a pest inspection carried out.”

REIWA president Joe White said while it appeared there was a lack of properties coming to market, the data told a different story.

“The number of settled sales for 2023-24 is already 2 per cent higher than 2022-23, and this will increase as more properties yet to settle,” he said.

“Properties have still been coming to the market in good numbers, but they are literally flying off the shelves, as shown by the low days on market.”

White said while it may sound good to sell your home sold in under a week, sellers then face the problem of finding somewhere to live, either to buy or rent when active listings remain at record lows.

According to REIWA the top-selling suburbs are on the cheaper end of the scale Baldivis, Armadale, Scarborough, Gosnells and Canning Vale. The median price of a house is $677,500.

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