The big news this month was without a doubt the RBA cash rate cut of 25 basis points to 4.1% at its February meeting, representing the first reduction since early in the pandemic. Expected to be the first of several cuts this year, we may already be starting to see the effects on some of the major capital cities with some surprising stats recorded in February.

Perth’s home value growth continued to slow in February according to Corelogic, recording just a 0.3% increase, in line with the combined capital cities’ average. The moderation in growth is becoming more evident, with Perth now showing a 0.3% increase for the rolling quarter and 14.9% for the year. CoreLogic’s national data indicated a 0.3% rise in dwelling values, with all capital cities experiencing similar marginal increases between 0.2% and 0.4%, except Darwin, which saw a -0.1% decline. Notably, Melbourne recorded its first monthly increase after ten consecutive months of falling home values, which could signal a shift in market sentiment.

REIWA reported 4,829 properties for sale across Perth at the end of February, reflecting a 12.1% decrease from January but still a 22% increase compared to the same week last year. Of note – stock is still 14% below last November’s level. Meanwhile, sales activity surged, with a 36.5% increase in transactions from January to February, reinforcing strong buyer demand alongside.

The City of Melville continued its upward trajectory, with a 0.75% price increase, bringing the monthly median house price to $1,350,000 according to REIWA. The area saw an 11.28% rise in total listings, climbing from 195 in January to 217 in February, but this is also still below November’s level. Sales activity jumped by 47%, with 96 properties sold in February compared to 65 in January showing that demand for homes in the City of Melville is strong.

Across our more local suburbs, February listings dropped by 9.94% from the end of January, indicating tightening supply. Applecross, Attadale, Bicton, and Melville all experienced a decline in available stock, while Booragoon saw an increase. Other suburbs remained steady, highlighting varied conditions across different pockets of the market.

Although the year is still young, early signs of stabilisation continue to appear. The Perth vacancy rate increased to 2% in January, the price growth rate is continuing to slow, and stock appears to be on the up again. Although we are expecting numerous interest rates drops this year, the bigger areas to watch in my opinion will be supply/demand mechanics, the state economy (so mainly iron ore prices) and population growth. Right now, supply still has a long way to go, and the population is still growing (albeit at a slowing rate). So the question will be, how long does it take for these to balance out and will iron ore maintain current price levels through 2025. For now, expect prices to continue a steady but slow up trend, along with supply levels.