House Prices Grow

Are you looking to sell your property in Western Australia in 2023? The real estate market in WA is experiencing a surge, with a projected moderate price growth throughout the year. According to REIWA's 2023 property market quarterly update, the median house price is expected to reach $580,000 by the end of the year.


Housing Market Overview:
The Western Australian housing market is on an upward trajectory, with the median house price already rising by nearly 2% in the June and September quarters, bringing the total growth to 4.6% since the end of 2022. This surge is reflective of the "records" theme in the market, with new records being set for house prices, the median time to sell, and a record low in the number of listings advertised for sale.


Three Key Factors Driving the WA Market:
REIWA CEO Cath Hart points out that three key factors, known as the "three As," are driving the WA market in 2023: Availability, Appetite, and Affordability. The state's population has grown by 2.8% in the year to March, the highest growth rate in the country. This robust population growth has fuelled a strong appetite for WA property that is expected to persist.

However, availability of housing stock remains low, with about 6.3% fewer homes coming to the market compared to the previous year. This supply-demand imbalance is evidenced by a 16.4% increase in the number of home sales, which is further propelling the market. Houses are selling rapidly, with the number of listings reaching a 30-year low by the end of September.

While property prices are on the rise, WA remains one of the most affordable places to buy in the country. The combination of higher-than-average incomes and lower-than-average mortgages means it's easier for people to buy and service a mortgage in WA, despite the rise in interest rates since May last year. Strong economic fundamentals, low unemployment, and record population growth support further price growth.


Unit Market Performance:

It's worth noting that the unit market has not performed as well as the housing market, despite strong demand for dwellings. The median unit price decreased by 1.2% from the end of last year to $400,000 by the end of September.


Perth Rental Market:
The rental market in Perth is also experiencing new records. The median house rent reached a new high of $600 per week by the end of August, up from $550 in December 2022. The median unit rent price also set a new record, rising from $475 at the end of the previous year to $550 in August.

However, the rental market is expected to remain challenging for tenants. The vacancy rate remains extremely low, and property managers are still seeing queues at home opens, with homes leasing in a median of two weeks. This high demand and low supply are likely to maintain upward pressure on rental prices throughout the year.

Looking Ahead:
While the property market is currently strong and underpinned by robust economic fundamentals, it's important to keep an eye on potential changes. The government has announced initiatives to boost housing supply in the long term, and builders are reporting strong interest from investors in Eastern States. However, it may take some time before new homes can be brought to the market and a change is felt.


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Written By Lee Tamblin
(Source: REIWA)