CoreLogic’s newly released daily dwelling values report validates this upward trend, showing a robust 1.8% increase in Perth property values over the last 28 days.
In a recent analysis, Louis Christopher, managing director and founder of SQM Research, foresees prolonged growth in the Perth real estate sector. "Perth is poised for gains exceeding 20%," he noted.
Christopher attributes this ongoing boom to several factors: strong job market growth, an influx of interstate migration, steady underbuilding, and a favorable GST deal with the Federal Government.
Despite the recent price hikes, Perth’s median values maintain relative affordability. As of July, the median dwelling value stood at $736,000, much lower than the average for capital cities at $864,000. This suggests Perth's property market still has more room to grow.
However, Western Australia, with its heart in Perth, is grappling with a severe housing shortage. In 2023, the population swelled by 93,800, while only 17,500 dwellings were added—a substantial gap fueling the surge in property rents and accentuating the fear of missing out (FOMO).
Yet, potential vulnerabilities lurk beneath this optimism. Christopher cautions that declining commodity prices, especially for iron ore, could dampen the property boom. A significant downturn in global commodity markets might halt Western Australia’s growth momentum, as reflected during commodity price drops in the previous decade. This earlier period of falling commodity prices corresponded with declining property prices and rentals in Perth.
Overall, Perth's housing market displays the characteristics of "boom-and-bust," showcasing intense growth phases mingled with volatility risks.
Source: Original article insights attributed to PropTrack, CoreLogic, and Louis Christopher of SQM Research.
