Perth Property Market: A Tale of Two Cities

While the East Coast of Australia has been through a boom in the last five years, the Perth property market has unfortunately been moving in the opposite direction.

After a long period of growth, the Perth market started to slow down in 2014-2015 and since that point in time has seen median house price falls across the city.

Perth’s Falling Median Price

According to HtAG analysis, the median house price in Perth peaked in Q1 2015 at A$579,602 and since that point in time has fallen to A$523,503 as of Q2 2020. That represents a fall of -9.7% in a period where other cities such as Sydney, Melbourne and Hobart performed incredibly strongly.

Perth Houses – Median Value

However, when we examine the areas that have led the falls, we can see that there is a pattern and not all LGAs are created equal when it comes to Perth property prices.

Growth Rate – LGA

While growth rates in Perth peaked in late 2014, much of that growth was being driven by LGAs that were in the outer regions of the Perth metropolitan area.

During the end of that growth stage, we can see growth above 5% in areas such as Gosnells, Canning, Kwinana, Belmont and Kalamunda. All areas with median values under the city-wide median price and all areas well out of the CBD.

Interestingly, during that same period of time, blue-chip inner-city areas were only experiencing moderate or slightly negative growth. With the likes of Subiaco and Nedlands falling in value in late-2014.

The price falls started to occur as the mining boom started to slow down, and a large exodus of workers led to steep increases in vacancy rates. At the same time, construction of new houses in the outer suburbs was reaching record levels, causing a perfect storm of falling demand and increasing supply.

Since that point in time, the outer suburbs, in particular, have been hit hard by price falls, while the inner-city blue-chip Western suburb locations have remained relatively resilient. The sheer number of properties in the outer suburbs has led to the overall fall in Perth’s median values, which as we’ll see has distorted the perception that the entire market has been falling.

Perth Prices in 2020

Perth property prices had started 2020 in strong fashion in many areas and there was a growing belief in the state that the bottom in prices had finally arrived. 

As we can see on the heatmap, while there was growing confidence in many areas, the growth patterns remained unchanged and similar between many areas of the city.

Heat Map – LGA

Again it has been the inner-city locations that have seen price rises while the outer suburbs continue to remain relatively weak.

Over the course of the last 12 months, it has been three of Perth’s blue-chip coastal suburbs that have seen the strongest price growth.

It’s important to note that median values can be distorted in suburbs that have had only limited numbers of transactions.

Mosman Park, WA 6912 + 12.33%

Mosman Park in Perth’s western suburbs has been one of the top-performing suburbs in the state and over the last 12 months, the median house price has risen by 12.33% to $1.6 million.

Mosman Park Houses – Median Price 

There has been a sharp increase in prices in Mosman park during 2019, which was led by strong demand for large established blocks.

Mosman Park – Growth Cycle

As we can see, prior to the Perth-wide slowdown, prices were increasingly strongly in 2015 and getting to a growth rate of 9.17%. It is also worth taking into account that Mosman Park has only seen a small number of transactions during 2020, which can potentially alter median values in the future.

Trigg, WA 6029 + 8.99%

Trigg in the City of Stirling is another premium location that has bucked the statewide price fall. Houses in Trigg have seen strong growth in the last 12 months, increasing in value by 8.99% taking the median house price to A$1.37 million.

Trigg Houses – Median Price 

Trigg is a blue-chip suburb on Perth’s northern beaches that feature large blocks of land and water views for many homes.

Trigg – Growth Cycle

As we can see, Trigg has seen mixed periods of growth over the last few years, however, since the Perth market peak in 2015 and subsequent fall, the median value in Trigg has climbed from A$1.1 million in Q1 2015 to its current median value of $1.37 million, reflecting a 24.5% climb over that period.

North Fremantle, WA 6159 + 6.33%

North Fremantle, which as it happens, backs onto Mosman Park and is another suburb that has seen strong growth in the last 12 months.

The median value of houses in North Fremantle has increased by 6.33% to A$1.29 million.

Once again, North Fremantle is well and truly entrenched in the premium area of Perth’s western suburbs.

North Fremantle Houses – Median Price 

As we can see from HtAG’s forecasts, Houses in North Fremantle have been steadily climbing since Q1 2016, where they dipped to A$1.1 million as the broader Perth property market fell away.

North Fremantle – Growth Cycle

The HtAG growth rate cycles show that North Fremantle houses grew as fast as 12.54% on an annual basis right at the peak of the boom in 2015.

Perth’s Next Growth Suburbs

As we’ve seen so far, while the overall median house price in Perth has been falling for five years, there are a number of suburbs that have not only bucked the trend but have in fact experienced double-digit growth over that same period of time.

So which suburbs are set to see strong growth in the next two years, based on HtAG forecasts?

Leederville, WA 6007 + 3.54% Forecasted Growth

Leederville, in the City of Vincent, is a suburb that is very close to the CBD and also features a strong cafe and restaurant culture. As we can see on the HtAG forecast, house prices in Leederville have been steadily increasing since 2008.

Leederville Houses – Median Price 

Even during the period from 2015-2020 where the broader market fell away, house prices in Leederville gained in median value from A$830,000 to where it currently sits at A$950,000.

That represents growth of 14.4% when we’ve previously seen the Perth median fall by -9.7%.

According to HtAG forecasts, that growth is likely to continue into Q1 2022, where the median price could rise to A$990,000.

As we can see on the HtAG Growth rate cycle, Leederville is a suburb that has rarely seen a price fall and in fact, has grown steadily over more than a decade.

Leederville – Growth Cycle

HtAG has labelled Leederville as a ‘Rising’ market with a medium level of confidence. To see suburbs with strong growth potential with high confidence, subscribe to one of our plans.

The strongest demand in Leederville and the City of Vincent is for three-bedroom houses. Note that the demand profile is based on LGA and not the suburb.

Demand Profile – Leederville

Applecross, WA 6153 + 2.41% Forecasted Growth

Applecross is another premium location within the Perth metro area, located south of the CBD along the river in the City of Melville.

Over the course of the last 12 months, the median house price in Applecross has increased slightly by 0.87% to A$1.5 million.

Applecross Houses – Median Price 

However, when we go back to Q1 2015, we can see that the median value hasn’t moved all that far in that time. But by comparison, we have to remember the overall median value of Perth house prices has fallen by -9.7%. So again, another blue-chip area that has held up well.

Applecross – Growth Cycle

As we can see on the price cycle growth chart, house prices in Applecross have been up and down since 2011, but are higher overall. With just the two real dips with negative growth in 2013 and 2019.

Looking forward HtAG predicts that the median price of houses will increase in the coming years to A$1.54 million.

HtAG has labelled Applecross as a ‘Rising’ market with a medium level of confidence. To see suburbs with strong growth potential with high confidence, subscribe to one of our plans.

There is the greatest demand for 3 bedroom houses in Applecross and the City of Melville.

Demand Profile – City of Melville

Inglewood, WA 6052 + 2.65% Forecasted Growth

Inglewood in the City of Stirling, is an inner-city suburb, northeast of the CBD, with plenty of reasons for strong demand.

Over the past 12 months, Inglewood has increased in value to 0.67% taking the median house price to A$937,000.

Inglewood Houses – Median Price 

The median house price is virtually unchanged in Inglewood since Q1 2015, however, price growth did fall away in 2017.

Inglewood – Growth Cycle

Within Inglewood and the City of Stirling, the greatest demand is for three bedrooms houses, however, there is also strong demand for three-bedroom semi-detached houses.

Demand Profile – City of Stirling

HtAG predicts the median value of houses in Inglewood will increase to A$961,000 by Q1 2022, which represents growth of 2.41%.

HtAG has labelled Inglewood as being at the ‘Bottom’ of the market with a medium level of confidence. To see suburbs with strong growth potential with high confidence, subscribe to one of our plans.

Conclusion

As we’ve seen with Perth property prices over the last five years is that quality matters. In Perth, there’s no substitute for quality houses in premium locations.

Not only have these blue-chip locations not fallen like the overall median price, but they’ve actually increased in value.

This clearly demonstrates that there is no one ‘Perth property market’ and there are opportunities for growth in any market if you know where to look.

While there are positive signs for the Perth property market, there are still many areas that you should be avoided at all cost and others that will see strong growth in the coming years. To see which LGAs and suburbs are set for growth in the next two years, you can subscribe to one of our plans and access forecast and property data from every suburb in Australia.

AUS Council Areas ( houses )


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Growth Rate Cycle Median Rent Median Rent YoY Change Projected Median Rent Projected Median Rent Change


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