10 Things to Know About the Perth Property Market in 2023
We know Western Australia recently had a great financial year 2022/23, particularly in the housing market.
Let’s take a close look at what matters to you as a Perth property investor or landlord and go through 10 important aspects of the Perth property market you should be aware of in 2023.
1. Housing Prices Are at a Record High
The Perth housing market has seen extraordinary gains, with median house prices reaching $555,000. That is a 4.6 per cent increase!
Highlighting this, Cath Hart, REIWA CEO, says: “Perth [emerged] as the only capital city to record moderate price growth over the financial year, despite constant interest rate rises.”
Take a look at the top ten suburbs ranked for price growth and the increase in rental yields.
2. Rental Yields are Strong
Perth’s rental market has produced strong rental yields with the top performing suburbs listed below.
|Suburbs||Rental Yield Year to May 2023||Median Unit Sale Price Year to May-23||Median Weekly House Rent 3 months to May-23|
3. Rental Market Is in Full Force
Due to legislative uncertainty, the pandemic, and other factors, the high demand and low supply have caused many tenants to be understandably stressed. After all, they face tight rental conditions and high rent prices.
Not to mention, rental properties get filled quickly, with rental vacancy rates plummeting to 0.6 per cent in December 2022 for the first time in 42 years and has been 0.7 per cent for the first half of 2023.
If you are a property investor or manager, you can expect several applications and high rental yields from your rental properties, especially units. If you look at annual growth, rental rates are up by 13.5 per cent. The median weekly rent price is $585 for houses and $530 for units.
4. Median Prices Are Still Within Reach
The increasing number of property sales is, in large, due to affordability. Perth’s median values remain lower than other capital cities, which is evident in the relatively affordable price points.
|City||Month||Quarter||Annual||Total return||Median value|
Source: CoreLogic September 2023
5. Perth Has an Insulated Economy
Would it surprise you to know that Perth is the only capital city in Australia to witness this growth in housing values? Perth, WA seems to enjoy an almost insulated economy, having its own housing market trends.
After the housing boom of 2021, house prices fell in Australia, but that was not the case for Perth house prices. With that in mind, you should focus your research on the Perth housing market to make well-informed decisions in the WA market.
According to Cath Hart, “The WA property market tends to behave differently from the property markets on the east coast of Australia. For example, when interest rates started rising, prices fell on the east coast but remained stable in WA.”
6. Your Suburb Has Its Own Trends
Trends differ not only on the state level but also on the suburb level! So, the Perth suburbs market might behave differently from the WA market or the national one.
For instance, the top ten fastest-selling suburbs have median house prices lower than the Perth median house price. That is partly because of the interest rate rises. The vast majority of the top ten suburbs for units were also below the Perth median unit price.
As for the fastest-selling suburb, it is Leda for houses and Baldivis for units with five and 12 selling days, respectively. (Source)
So, stay updated on the trends in your sub-regions. This way, you can strategise according to your suburb’s property prices, rental yields, and house and unit sales.
7. The Market Favours First-Time Buyers
If you have never owned a home, the Perth house market is a great place to do so. Do a bit of research or consult with a real estate specialist. You will find that the market incentivises citizens to own property with grants, tax benefits, concessions, and opportunities for first-home buyers.
For example, there’s the state Government initiative, KeyStart. With low deposit loans and no need for a savings history or Lenders Mortgage Insurance, securing affordable homes is possible.
8. Scammers Are Lurking on Social Media
Beware of rental scammers. They know the rental house and unit market is highly competitive, which makes applicants vulnerable. If a landlord or property manager claims that they cannot show you the place because they are out of town or so, they are probably scammers.
Also, if they use Facebook Marketplace, WhatsApp, or Gumtree, we do not recommend finding rental vacancies that way. If you do, Google the property address, or search for it on REIWA to confirm its legitimacy. Then, contact the property manager. And whatever you do, never send funds to secure a lease before touring the rental property.
9. Settling for the Next Best Thing Is Worthwhile
According to CoreLogic, Perth presents one of the best investment opportunities among most other capital cities, thanks to its low rental vacancies, increasing rent prices, strong growth, and potential capital gain. In other words, you want to enter that property market as soon as possible. Some of the best suburbs for investors according to CoreLogic are; Hocking, Forresfield and Brabham.
Remember that Perth home values have increased due to affordability, which means you have a chance. If a property in your dream suburb is too expensive or unavailable, consider buying in nearby suburbs, also called bridesmaid suburbs. These areas might be within your price range and feature some of the perks you want. If you cannot afford a house, look for units, as they are relatively affordable.
10. There Is More Where That Came From
Hart believes that the property market will remain strong. To explain what makes her confident in this, she says, “WA’s population is growing, and people are choosing to buy established homes rather than tackle the rental market. Increasing costs and ongoing delays in the building industry are also seeing people buy rather than build.”
As for tenants, they will be glad to know that Eastern state investors have taken an interest in Perth property, which means there will be more supply. However, it will take a while before these stretches of land turn into investment properties.
Want to keep up with Perth property trends? Let our team guide you.
Ultimately, the strong economy in Perth this financial year is promising.
Investors and landlords can mostly enjoy a lower vacancy rate, record-high house values, higher rent, and more demand compared to the supply.
If you are thinking of buying property, you will probably find the median price relatively reasonable, which suggests that this may be a good investment opportunity, but will depend on your unique circumstances, as well as your long-term personal and lifestyle goals.
Get Your Free Appraisal
If you are a landlord or investor, a rental appraisal will tell you how valuable your property is, which is a great place to start.
Contact us at HERE Property for a free appraisal.