Perth housing forecast 2024
Capital growth is predicted to increase by as much as 15 per cent in 2024. Image: Canva.
  • Perth's housing market saw a 30-year low in listings this year.
  • Experts predict steady price growth of around 10% in Perth's housing market in 2024.
  • An increase of interstate investors is expected due to favourable conditions.

One of the Perth real estate market’s defining features for this year has been a stark shortage of homes, hitting a 30-year low of 4,931 homes in September.

Unsurprisingly, limited supply has exerted upward pressure on Perth’s housing market, with prices hitting a record 10.8% increase compared to last year.

This figure is in line with SQM Research’s figures, which found Perth property prices recorded an annual rise of 10.3%.

Perth’s weekly property prices

Moreover, Perth’s rental market has been a veritable battlefield for tenants, with vacancy rates plummeting as low as 0.7%, and other data finding rates were as low as 0.3%, making it the lowest in the country and equal with Adelaide.

Looking ahead to 2024, Momentum Wealth managing director, Damian Collins, exclusively told The Property Tribune that steady price growth in Perth’s rental and housing market is expected.

Damian Collins
Damian Collins. Image: Momentum Wealth.

“Based on our team’s market research, our forecast for Perth’s residential housing market is 8% to 10% in 2024.”

“In the rental housing market, we expect growth of 5% to 10%.

“With a low volume of homes for sale and rent, coupled with delays in construction commencements and completions, demand is outstripping supply and properties are selling at a record pace,” said Collins.

The Property Tribune reached out to a range of experts for their predictions for Perth’s 2024 housing market including Collins; Pulse Property Group director, Zac Addenbrooke, Property Powerhouse founder and CEO Garth Davis, Rethink Investing founder and managing director Scott O’Neil, and Strategic Property Group managing director, Trent Fleskens.

Competition unlikely to cool

Pulse Property Group director, Zac Addenbrooke, said that while more stock will enter Perth’s housing market over the coming months, it will not be enough to cool the property market competition.

Addenbrooke pointed to Shelley, a suburb 10 kilometres away from Perth, which he said averaged around 80 to 90 properties for sale at any given point during 2018 and 2019.

“It now averages 20 to 25 properties for sale at any given time.”

Zac Addenbrooke, Pulse Property Group

“In comparison, the Perth Metropolitan market typically has around 12,500 properties for sale at any given time.”

However, over the past 12 months, Perth’s metro market has averaged around 4,900 properties for sale.

“Whilst the housing market has continued to defy expectations, without significant change in supply and demand fundamentals, the current trends are likely to be sustained for some time.”

Zac Addenbrooke, Pulse Property Group

“The rental market is following the same sentiment, whereby we continue to hold a record low vacancy rate; this is placing further strain on the residential sales market as our growing population needs somewhere to live, and people are turning to the established homes market for the solution.”

Perth’s rental yields

Property Powerhouse founder and CEO, Garth Davis, said the bottom quartile, where prices hover around $550,000, is where much of the growth is happening.

“The demand is in the cheaper properties, those are the ones creating value.”

Garth Davis, Property Powerhouse

Davis also predicted a whopping capital growth increase of 15% in 2024.

“It’s a significant price increase, the strongest market in the country by a long way,” he said

Increasing interest from interstate investors

Rethink Investing founder and managing director, Scott O’Neill, predicts further interest in Perth’s real estate market from interstate investors.

Scott O'Neill from Rethink Investing buyers agent rebaa member
Scott O’Neill. Image: Rethink Investing.

It was reported a few months ago that across the first quarters of 2022 and 2023, property investors around the nation had overwhelmingly opted to funnel their investments toward Western Australia.

“The affordability factor relative to their home states is also attracting increasing investment from interstate investors,” said O’Neill.

However, Addenbrooke said while the decline in the number of Perth rental properties appears to have stabilised, it is not increasing.

“Local investors are still selling and although eastern state investors are showing a lot of interest in our market, they seem to simply be replacing those who have left.”

Zac Addenbrooke, Pulse Property Group

Davis added that investors from over east are likely to keep pouring in for a few reasons.

“We have the best opportunity for capital growth in the short to medium term, we have affordability, and our rental yields are at 6%.”

Garth Davis, Property Powerhouse

Perth’s key distinguishing feature, however, is in its more favourable treatment of investors compared to Victoria, according to Davis.

“I wouldn’t say Perth’s environment is pro-investor, but it’s not anti-investor,” he said.

“The thousands and thousands of investors are selling in Victoria because the Victorian government is going after property investors like they are cash cows; the land rates, council rates, residential tenancy reforms, it’s overwhelmingly in favour of the tenants.

“It disadvantages property owners, so a lot of them are coming to Perth, where there is less government interference.”

Rigid fundamentals equals a predictable outcome

Strategic Property Group managing director, Trent Fleskens, said all suburbs under $800,000 will be primed for growth in 2024.

“I think we’re going to see a 12% price growth next year,” he said.

“Due to the fact that we have record low supply, continual demand, and a deficit of construction.”

Fleskens said because the fundamentals have not changed, the outcomes are not expected to change either.

However, Collins noted there are a few headwinds that could slow the market.

“Consumer sentiment and purchasers’ borrowing capacity have fallen due to the interest rate hikes we’ve seen since 2022,” he said.

“The apprehension of an economic downturn and heightened global tensions due to conflicts could see investors adopting a more cautious investment strategy and see some of them sit on the sidelines in 2024.”

Damian Collins, Momentum Wealth

Davis agreed that interest rates – which have risen 13 times recently – were the elephant in the room as far as interferences to price growth.

“It’s looking like we’ve peaked,” he said.

“But if some data came out that people didn’t stop spending – that could spoil the party.

“Or if there was some crazy international crisis – covid, a major war – but confidence is strong at the moment.

“All things being equal, it’s a low risk market.”

Davis added that the tight vacancy rate is unlikely to change much, barring changes in supply and demand, neither of which is looking likely.

“We’re not going to have an oversupply issue for at least five years, and for demand to shrink, something severe would have to happen to iron ore, resulting in workers being laid off,” he said.

“Prices aren’t going to come down, probably not for the next two years.”

~~

View our Sydney property predictions for 2024 here, and our Melbourne property predictions here.



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