The decline in national house prices has disappeared following 4 consecutive monthly increases since March 2023 totalling an increase of 2.3%. Perth has recorded month on month increases since March of .05%, 0.6%, 1.3%, and 0.9% making it the 2nd best performing capital City this year. Again, the Perth market shows its resilience being the only capital City to post record high prices as of June 2023 – all other capital cities are still between -1.2% and -12.6% lower than their last cyclical highs.
The state economy, mining, unemployment, and interstate migration remain strong in WA. This, in combination with extremely low supply, strong demand, a historically tight rental market and high affordability, remain the key factors driving the Perth market. Strong sales results have continued through quarter 2 this year, and stock levels are dropping month on month to now only 5,328 properties for sale across Perth which is well below half the stock we need to meet even an average demand level. The average days on market for Perth is still holding at around 11 days.
We noted in our December 2022 Report that growth in Perth property prices could be largely hinged to how many more rate rises are to come. The RBA has since increased rates on four occasions up to 30 June 2023, but this has not deterred price growth and is unlikely to if more rate rises are to come, given the significant shortage of stock and other strong key market drivers.
Inflation will still be a major factor in future decisions to change rates, but with inflation continuing its downward trend, experts are predicting that trend to continue to drop to 5.4% by years end. More good news for the Perth market.
However, the current housing shortage is a real crisis and one that I can’t see a way out of yet. The measures the state government are currently looking at will be long drawn-out processes and none appear to be a sure-fire fix with many likely to create other problems that will need addressing. For example, throwing money at overseas workers to address the construction labour shortages will only also create housing needs for those workers – but isn’t that the problem they are trying to solve?
Around our local markets, since some softening the early part of Q1 2023, we saw a resurgence in buyer activity through to the June quarter. Buyers are still taking time before making purchasing decisions and are stilling holding out for the ‘right one’ but any property that ticks most boxes will get snapped up quickly, and this is happening across all price points. We are seeing some buyers coming back into the market for the “one that needs work” which wasn’t the case at the end of 2022. Presentation of your property is still critical and there is a large price divide for properties that aren’t presented well to market. Sales strategy, pricing strategy and marketing of properties is also critical if you want a top result in the current market. Those who don’t get this right can risk being exposed to longer sales campaigns and potential price reductions.
If you’re wondering where your property sits in the current market, we can provide a complimentary and obligation-free price update.
Get in touch on 0447 120 125 or james@mgpproperty.com.au to discuss.
