Despite some analysts asking, “are house prices dropping in Perth?” and foreseeing a drop, REIWA’s 2023 property market quarterly update suggests a more optimistic outlook, predicting low to moderate growth in house prices and a stabilisation in unit prices for the year.
This forecast challenges the notion of a market downturn, inviting a closer examination of the underlying factors at play.
Current State of House Prices in Perth
Amidst the ebbs and flows of the economy, Perth’s housing market has demonstrated notable resilience. Contrary to a predicted fall, there’s been an increase in the median house price, which stands at $575,000 as of November 2023, according to REIWA’s data.
The steadfast performance of the housing market is indicative of a robust demand for housing, bolstered by Western Australia’s population growth, which has recently been reported at 2.3% and is expected to continue its upward trend.
For those considering relocating, understanding how much money do you need to live comfortably in Perth is essential to plan finances in this active market.
Rental Market Dynamics
The rental segment in Perth tells a story of its own. With house rents reaching a record median of $580 per week and unit rents climbing to $525, the rental market is experiencing unprecedented highs.
This surge is occurring in a context of a persistently low vacancy rate of 0.7%, emphasizing the competitive nature of the rental landscape. However, there is a glimmer of relief on the horizon; early signs indicate a slight softening of the market, with rental listings showing an uptick and an increase in supply becoming evident.
Factors Influencing House Prices
Several elements shape the ebb and flow of house prices in Perth. Interest rates are a significant factor; low rates tend to boost borrowing and demand for houses, while rising rates can dampen buyer enthusiasm.
Economic indicators like growth and employment also sway purchasing decisions – a thriving economy emboldens buyers, whereas economic slumps can deter them.
Supply and demand further dictate market dynamics; a housing shortage can drive prices up, whereas an excess can lead to price reductions. Moreover, governmental policies and inflation rates can influence buyer capabilities, and demographic shifts can alter housing needs and preferences, impacting demand.
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Current Trends in the Perth Housing Market
The Perth housing market has been dynamic, reflecting varying trends across different segments. While median house prices have seen a modest increase, unit prices have faced a slight decline. The rental sector, notably tight with record-high rents and low vacancy rates, suggests a competitive market for tenants.
“Despite these pressures, there are signs of an improving rental market with increased listings. Looking ahead, market experts suggest that Perth’s housing market will be shaped by ongoing population growth, economic performance, and a balance between supply and demand.”
Regional Analysis
Perth’s regional property market mirrors the strength seen in the metro areas, with median price growth reported across most regional centers in the first half of 2023.
Well-presented homes that are priced correctly tend to sell quickly and attract multiple offers, underscoring the importance of market alignment.
Population growth bolsters regional property markets, and the challenges of building in these areas often lead buyers to the established market. With low vacancy rates and strong demand, rents in these regions have also been climbing, a trend observed across Western Australia.
| Suburb | Median House Price | Percentage Increase |
| Iluka | $1,082,500 | 27.4% |
| Leederville | $1,165,000 | 27.3% |
| Mount Hawthorn | $1,270,000 | 26.4% |
| North Perth | $1,155,000 | 23.5% |
| Kensington | $1,125,000 | 23% |
| Subiaco | $1,690,000 | 20.7% |
| Salter Point | $1,630,000 | 20.5% |
| Mount Claremont | $1,750,000 | 20.1% |
| North Beach | $1,365,000 | 20% |
| Winthrop | $1,100,000 | 19.6% |
Outlook for Perth’s Housing Market
Looking forward, Perth’s housing market appears poised for sustained activity, with indicators pointing towards continued interest and investment in the region.
The interplay of factors like interest rates, economic conditions, and demographic shifts will likely keep the market dynamic. Buyers and sellers must stay attuned to these trends for strategic decision-making.
Advice for Prospective Buyers
For those eyeing the Perth market, due diligence is key. Prospective buyers should explore the latest houses for sale in Perth to gain a comprehensive understanding of what’s available and to assess how current trends may affect property values in various neighborhoods.
FAQs: Are house prices dropping in Perth?
Suggested reading: If you’re enjoying this read, don’t miss out on our comprehensive guide on buying a house in Perth for a deeper dive into the local real estate market.
What is the real estate forecast for Perth in 2024?
According to News.com.au, homeowners in Perth can expect an 8.4 per cent increase in property values for the 2024 financial year, with Perth anticipated to experience the strongest growth. However, Hobart is predicted to overtake Perth’s growth as we head into the 2025 financial year.
What will house prices be in 2025 in Perth?
News.com.au suggests that by 2025, Perth’s median house price could be around $678,000, compared to Sydney’s expected average of $1.53 million and Melbourne’s $1.02 million.
Is 2023 a good time to buy a house in Perth?
Here Property indicates that despite rising interest rates in 2023, Perth’s property market is seeing low rental vacancy rates and increasing rental returns. The market conditions in Perth are considered to be better than in other states and territories across Australia, suggesting it may be a good time to buy.
Should I buy a house now or wait until 2024 in Australia?
Canstar advises that home buyers in larger cities like Perth might benefit from waiting until 2024 when prices may have softened or at least not risen. However, they caution against waiting too long, as interest rate cuts could lead to a rapid return to growth in property prices.
