- The Perth housing market has yet to reach its full potential.
- More affordable markets are predicted to perform well.
- Those markets are also centres of employment or seeing infrastructure upgrades.
Perth property prices recently hit new records. Data from the Real Estate Institute of Western Australia (REIWA) revealed Perth’s real estate market broke house price records across the 2022-2023 financial year. As July wrapped up, REIWA data also revealed Perth house prices beat the 2014 peak, reaching a new high of $560,000.
A new Hotspotting report on the Perth property market reveals that the growth is yet to stop, as Perth’s full potential has not been fully realised.
Hotspotting Director, Terry Ryder, said Perth continues to be Australia’s strongest property market, with a busy and competitive housing scene and rising prices.
“The key information for real estate consumers is that Perth remains a long way short of having fulfilled its potential for growth,” he said.
“The housing market in Perth is expected to continue experiencing price increases in the near future, which can be attributed to the fact that it continues to offer affordability compared to other major cities in Australia.”
The Property Tribune can exclusively reveal Hotspotting’s insights and analysis into which Perth locations are predicted to have more sales and price growth across the next six months.
UPDATE: In September, the Reserve Bank of Australia’s (RBA) kept rates on hold at 4.10% for a third consecutive month. While broadly expected to instil confidence in home buyers and property investors, CoreLogic head of research, Eliza Owen, told The Property Tribune regarding the rate hold that, while prices have been on the rise, the housing recovery is still impeded by high interest rates and affordability hurdles in the near term.
“While a pause in the cash rate may gradually instil more confidence in the market, this is still very much an uncertain and thinly traded upswing.”
UPDATE: Recently released CoreLogic data shows the Australian property market has hit $10 trillion again, the first time since June 2022. This follows continued growth in property values, driven by both median price rises and more stock on market.
UPDATE: Should government clamp down on short term rentals, the impact on the market is expected to be minimal, as the number of suitable homes that could hit the market is a mere 8,000 for Perth, according to a recent review of the short stay accommodation market by the Real Estate Institute of Australia (REIA).
UPDATE: Some of Perth’s strongest property hotspots also included locations close to the city’s top schools, with suburbs close to Sorrento Primary School and Winthrop Primary School seeing double digit percentage growth in the June quarter.
Perth’s top five property hotspots
- City of Stirling,
- City of Canning,
- City of Armadale,
- City of Belmont,
- City of Gosnells.
“According to the CoreLogic Home Value Index published early in August, the median house price for Perth is $625,000 – less than half the median price in Sydney, which is now over $1.3 million, and a long way below Melbourne’s $924,000,” said Hotspotting general manager, Tim Graham.
“It also falls well short of the $960,000 in Canberra and the $820,000 in Brisbane,” he said.
“Even Adelaide and Hobart are significantly more expensive than Perth. Indeed, in Adelaide, you pay $100,000 more for the average house than you do in Perth.
“Only Darwin among the capital cities has cheaper houses than Perth.”
Ryder said the situation is similar for apartments.
City of Stirling
Ranked as Hotspotting’s number one national growth star in the Autumn 2023 Price Predictor Index, the LGA is the largest in Western Australia and is the second largest employment area in the state.
“Of the 24 Stirling suburbs in the winter analysis, 19 were found to have positive sales patterns – only one down from that of the Autumn report,” said Ryder, who noted the LGA could have easily won the national growth star accolade in Winter too.
“Leading Winter suburbs, which also both made the National Top 75 list of Supercharged Suburbs, include Doubleview and Karrinyup.”
The attractive location and a growing range of quality amenities are also significant attractions for the area.
“It’s therefore unsurprising that the Stirling postcode of 6061 – Balga and Nollamara – now attracts some of the highest numbers of first home buyers in WA.”
City of Canning
Another Perth location hailed for its affordability is the City of Canning, with many locations recording median house prices in the $400,000s to $500,000s range.
“Most of Canning City suburbs recorded growth in their median house price in 2022 and in 2023 to date,” said Graham.
“Parkwood experienced a 10% annual rise to reach a median of $570,000 based on 79 sales.
“Shelley also saw stand out annual growth of 19 per cent, based on 43 sales.”
Graham said Canning City’s average annual growth over the past decade remains modest at four to five per cent.
“However, with the growth currently being experienced in this precinct, it’s likely these figures will improve in the near future,” he said.
City of Armadale
Sitting close to an hour out of Perth, the City of Armadale also plays the affordability card well, with medians ranging between $300,000 to $400,000.
“The Autumn 2023 edition of The Price Predictor Index found that the stand-out precincts were municipalities towards the bottom end of the Perth market, including the LGAs of Armadale and nearby Canning,” said Ryder.
“Of the 10 City of Armadale suburbs in the report’s analysis, seven were rising or consistent markets, which included Camillo (median house price $335,000), Kelmscott ($380,000) and the suburb of Armadale ($315,000).
Ryder said the suburb of Armadale is the most affordable location and the most popular with buyers, recording 448 house sales in the past year, more than double the number sold two years earlier.
“This has resulted in strong price growth across the precinct,” he said.
“Camillo leads the pack, with its median house price up 14% from a year ago, according to CoreLogic data.
“Armadale and Seville Grove ($405,000) were not far behind, up 13%. Brookdale ($350,000) and Piara Waters ($625,000) both rose 12% over the year.”
City of Belmont
Close to both the Perth CBD and the airport, the suburb is set to benefit from a range of major infrastructure projects, including the airport expansion, airport rail line, and Tonkin Highway upgrade.
Graham said Rivervale is the busiest suburb for property sales in the LGA, recording 143 house sales and 327 unit sales in the year to May 2023, according to CoreLogic.
“The suburb has seen its median house price increase by six per cent during this time to $625,000,” he said.
Graham said rental yields for houses in the LGA are typically 4.5% to 5.5%.
“The best yields can be found in Cloverdale, where the typical yield of 5.5% is based on purchase price of $490,000 and a weekly rent of $480,” he said.
“Units are generally cheaper to buy and typically priced in the $300,000s. Yields are higher in the unit sector – typically around 6.5% to seven per cent.”
City of Gosnells
Next door to Armadale, this LGA is set to benefit from billions of dollars going into the shipping industry and renewables projects.
Ryder said more than 40,000 people are projected to move into the Gosnells LGA by 2036, which means around 20 new homes will need to be built per week.
Like Armadale, the City of Gosnells tends to have homes within the $300,000 to $400,000 range.