Perth’s property market is booming, but owners are still selling at a loss in these suburbs

New figures show an increasing number of west coast property owners are selling their homes for a profit – except for a handful of high-density neighbourhoods in the city.

Perth now has the third-highest rate of profit-making sales across the capital city markets at 97.4 per cent, with houses far less likely to see a loss according to CoreLogic’s latest Pain and Gain report.

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

Unlike Adelaide and Brisbane, where the rate of profit-making sales dipped slightly in the three months to December, the profit-making sales rate in Perth increased in the three months to September.

Houses had a slightly higher rate of profit-making sales than units, at 98.6 per cent and 94.6 per cent respectively.

CoreLogic’s head of research Eliza Owen said the rate of profit-making sales across Perth had grown remarkably in the past few years, from a recent low of 56 per cent in July 2019.

“Despite mixed market conditions, declining capital growth and lower clearance rates, Australian property continues to deliver strong profitability,” she said.

“At 97.4 per cent the rate of profit-making sales is at its highest level since the March quarter of 2008 when it was 97.7 per cent, around the height of the 2000s mining boom.”

In the Perth LGA, which includes the suburbs of East Perth, West Perth and the CBD itself, more than 18 per cent of sales lost money.

No homes sold for a loss in Bassendean, East Fremantle, Claremont, Mosman Park, Nedlands or Peppermint Grove.

Strategic Property Group managing director Trent Fleskens said the high rate of profit-making sales, particularly for houses, reflected ongoing demand driven by population growth and limited supply in desirable areas.

He said the trend was likely to continue, especially given Western Australia’s strong economic performance and the ongoing influx of interstate and international migrants.

“However, the fact that 18.3 per cent of sales in the Perth LGA are still making a loss is noteworthy and reflects the unfortunate reality of that so many purchases of these apartments were made at the peak of the last boom, which for many cases still hasn’t been surpassed when re-selling the same apartment,” he said.

“This is making it hard for developers to convince the market to buy their new apartments at record levels, especially in the CBD. Although, Finbar’s current development across the road from Queen’s Gardens is an exception.”

Nationally, Brisbane sellers had the highest profitability across the capital cities, at 99.6 per cent of sales, followed by Adelaide at 99.1 per cent and then Perth.

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