Perth Real Estate Market & House Prices

2 thoughts on “Perth Property Market Forecasts”

1. 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 typical house price falls across the city. According to HTAG analysis, the typical 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.

   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. 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 typical values under the city-wide typical 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 even 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 typical values, which as we’ll see has distorted the perception that the entire market has been falling.

   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 situation remained the same in many areas of the city.

   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.

   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 typical house price has risen by 12.33% to $1.6 million. There has been a sharp increase in prices in Mosman park during 2019, which was led by strong demand for large established blocks. As we can see, prior to the Perth-wide slowdown, prices were increasingly strongly in 2015 and getting as high as 9.17%.

   Trigg in the City of Stirling is another premium location that has bucked the statewide price falls. Houses in Trigg have seen strong growth in the last 12 months, increasing in value by 8.99% taking the typical house price to A$1.37 million. Trigg is a blue-chip suburb on Perth’s northern beaches that feature large blocks of land and water views for many homes. 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 typical value in Trigg has climbed from A$1.1 million in Q1 2015 to its current typical value of $1.37 million, reflecting a 24.5% climb over that period.

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

   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 typical 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 should be avoided at all cost and others that will see strong growth in the coming years.

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2. With a population of 2 million people. The Perth economy is largely driven by the mining, oil and gas industries. These industries account for a large portion of of the state’s GDP.

   The city is also a major hub for finance, retail and tourism. The Perth Mint is one of the world’s largest producers of gold bars and coins. The city is home to many of Australia’s largest companies, including BHP Billiton, Rio Tinto and Woodside Petroleum.

   Perth is somewhat isolated from other economic hubs in the country, but this isolation has not stopped it from being a major economic player. The city has a modern infrastructure and is well-connected to the rest of Australia and the world.

   The Perth economy is expected to continue to grow in the coming years, driven by the state’s strong resources sector.

   As Perth population grows, so too does consumer spending power. This is good news for local businesses, with retail sales forecast to grow. Higher consumer spending is also driving strong growth in the city’s hospitality and tourism sector.

   Business investment in Perth is also on the rise, with the Department of Treasury forecasting a yearly increase of up to 5%. This is being driven by strong growth in the mining and construction sectors, as well as increased investment in commercial and residential property.

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