While there are some early signs that, maybe, Sydney and Melbourne markets are starting to moderate, all the evidence suggests that the opposite is happening in many other markets across Australia, including Perth.
The Perth market is undoubtedly the strongest it’s been since the end of that big resources investment boom almost 10 years ago.
After several years of downturn, the Perth market moved into recovery mode in 2020 and then became considerably stronger in 2021.
All the indications suggest that 2022 will be a boom year.
There has been a flurry of sales activity across the Perth market in recent times and it has not yet translated into major growth in house prices.
CoreLogic claims the median house price for Perth has risen 7% in the past year, while the SQM Research annual growth figure for Perth, as at April 2022, is 11%.
These numbers, I have to say, do not really correlate with the anecdotal evidence from the coal-face of the property industry in Perth.
Valuers, buyers’ agents, selling agents and individual investors report a highly competitive market in which properties are selling quickly for higher-than-expected prices.
The Perth market is considerably more buoyant than the price data suggests.
And, looking across ALL of the available data, I expect 2022 to be a stronger year for price growth in the Western Australia capital than those recent figures from CoreLogic and SQM Research.
There is an accumulation of positive factors likely to generate stronger prices, including:-
- the re-opening of the state’s borders, as well as international borders
- the uplift in the WA economy
- Perth’s status as the most affordable capital city in Australia
- very low vacancy rates, with SQM Research and Domain both reporting a citywide vacancy rate of just 0.5%
- strongly-rising residential rents
- sales activity happening at record levels
Our analysis of the quarterly data on sales volumes shows that the Perth market is now at the highest levels we have seen since we started our quarterly surveys seven years ago.
And now that people can move freely into and out of Perth and WA, we expect this to be a busy year in real estate, with prices rising at rates that will exceed those in some of the bigger capital cities.