Perth Playing Catch Up

This week, the Real Estate Institute of Australia (REIA) released its Market Facts report for the December quarter, rounding out the calendar year.

Anecdotes about the soaring Perth property market and lack of local affordability have been laid bare by the numbers. Perth remains, by some margin, the most affordable capital city in Australia to buy a house.

The average weighted median house price for the eight capital cities for houses sold in the December quarter was $1,022,616, a rise of 5.6 percent.  Perth’s median house price for the quarter was 48 percent below the national average at $525,000, a mere 1 percent increase. In contrast, Brisbane outperformed all other capitals with a whopping 10.2 percent rise in median house prices in the December quarter alone.

Sydney’s median house price for October to December was a staggering $1,601,467. Other capitals performed well too with Hobart up another 9.2 percent to return a median of $775,000. Adelaide reached a median of $600,000, an 8 percent rise.

The gap between demand for detached houses versus all other dwellings such as flats, units, apartments, terraces and the like continued to widen. Australia-wide, other dwellings rose in median value by 1.8 percent. Hobart led the way with a rise of 6.1 percent for the quarter in this category. Perth moved 1.2 percent.

Across the year, home owners in Sydney have enjoyed a 33.1 percent increase in house prices, Hobart 31.4 percent and Brisbane 26.8 percent. Canberra houses gained 25 percent, Darwin 18.5 percent, Melbourne (despite numerous lock-downs) was up 21.5 percent and Adelaide 16.8 percent. The national average median house price in capital cities increased in 2021 by 25.1 percent. By contrast, in 2021, Perth managed a 7.1 percent rise in house prices and 9.2 percent for other dwellings.

Interestingly, Perth’s median weekly rents rose 13.2 percent for the year, the highest annual growth in the nation. Canberra remains the most expensive place to rent a three bedroom house at a median rent of $615 per week.

So, why is Perth so far behind the rest of the nation when it comes to dwelling price growth? There is no single answer, although if I had to choose two major reasons, the first would be general lack of growth in Perth property values over the past decade and the second, our hard border for much of 2021.

The difficulty in getting to WA, or getting back in after you’d left, has left our population stagnant. The Premier’s last-minute decision to delay the border opening from February to March seriously damaged our reputation as a place you can freely come and go from. This was the last straw from many would-be arrivals. I think they’ve now gone elsewhere or stayed put.

It may take some time for people to re-imagine coming to WA to live, play and work. Many will be looking at our house prices and be astonished how affordable it is to live here compared to elsewhere in Australia. Perhaps then, we’ll see some more upward pressure on prices.