Perth Median to hit $740,000 by December 2024

Perth’s median house price is on track to achieve growth of more than 20 per cent over 2024, according to REIWA’s latest property market quarterly update.

REIWA CEO Cath Hart said if the market continued on the current trajectory, Perth’s median house sale price could reach $740,000 by the end of 2024.

“Demand remains strong, houses continue to sell in record time and prices keep rising,” she said.

“Currently, Perth’s median house price at the end of June was $668,000, already 11.3 per cent higher than at the end of December 2023 and 22.6 per cent higher than the previous peak of $545,000 set in 2014.”

Ms Hart said the median unit sale price was also expected to hit a new record in the coming quarter.

“After seeing little growth for most of 2023, the median unit sale price has recorded 8.3 per cent growth since December to reach $445,000 at the end of June,” she said.

“This is just $5,000 below the previous peak of $450,000 set in 2014 and if the current trend continues it will exceed this very soon.”

Ms Hart said the market continued to be driven by strong population growth and constraints in the building industry.

“WA recorded 3.3 per cent population growth in the year to December, which included about 79,000 net arrivals through overseas and interstate migration,” she said.

“That’s about twice the population of Baldivis, which significantly boosts the demand for housing.

“While new home starts are being now completed in quicker timeframes, Perth’s overall housing completions remain low so we have an ongoing imbalance between supply and demand.”

Ms Hart said there would need to be an unexpected change in current conditions to slow Perth dwelling price growth.

“We will continue to watch the data and update our forecast accordingly,” she said.

Perth rental market

While Perth’s median rent prices are at record highs, they remained stable over the June quarter following several periods of increases.

Along with other indicators, such as an increase in median time to lease and the number of rental listings, the data suggested the rental market was easing slightly.

Ms Hart said demand had been self-moderating and there was an increase in new supply.

“We’ve seen an increase in tenant household sizes as people seek to share the cost-burden of renting, and people are choosing not to rent if possible, which has changed the nature of demand,” she said.

“The rental market is also benefiting from the completion of investor-owned new builds, which is adding to rental supply. According to ABS data, investors made up 36.6 per cent of loans for the construction of dwellings in the 12 months to May 2024. This compares to 13.8 per cent in the 12 months to May 2022.

“Supply will continue to increase as more of these homes are completed in the coming months.”

At the end of June, the Perth median dwelling rent price was $650 per week, unchanged from March, but 8.8 per cent higher than December 2023.

Perth’s median house rent price was also $650 per week, unchanged from March and 4.8 per cent higher than at the end of 2023.

The median unit rent price was $600 per week, unchanged from March and 5.3 per cent higher than six months ago.

Ms Hart said conditions varied across Perth’s rental market, but there had been a fall in demand for properties over the median rent price, with homes taking longer to rent and some discounting occurring.

“The market has reached an affordability ceiling so while there could still be growth in median rent prices over the remainder of 2024, it is likely to be small,” she said.

Regional WA

“Median house sale prices across most of the regions are likely to see growth over the remainder of 2024, with the strongest growth expected to be in the South West,” Ms Hart said.

“The regions’ rental markets are more constrained than Perth and less likely to see the benefits of new supply in the short term due to the challenges of building in the regions.

“Rental conditions in the regions vary, some areas are currently experiencing rent price stability while some have the potential for more growth.”

REIWA will be publishing its regional June 2024 quarter report in late August.