Welcome to our May 2024 market wrap, where we dive into the latest real estate trends and key statistics that defined the market last month.
National Overview
Nationally, dwelling values saw a modest increase of 0.8%. However, the standout performer was again Perth, where the market experienced a significant 2% rise in May, culminating in an impressive 6.1% increase over the past three months. The median dwelling value in Perth has now surpassed $736,000, marking a remarkable 22% increase over the past year. This rate of increase is nearly three times the annual growth rate of combined capital cities.
REIWA Market Insights
According to the REIWA, at the end of May there was only 3,270 properties for sale across Perth metro. This figure represents a circa 10% decrease from the previous month and a substantial 42% drop compared to the same time last year. Despite this, the stock clearance rate remained steady at 22% with the decrease in stock offset by lower sales volumes for the month which was a similar 10% drop from the previous month.
City of Melville Focus
In the City of Melville, the monthly median house price reached another high in May of $1.15 million. The number of properties sold in the region increased to 157, a 33% rise from the previous month. Listings slightly decreased to 176, but with an impressive stock clearance rate of 47%, the highest so far this year.
Available stock in our favourite City of Melville suburbs remained mostly stable, except for a decline in listings in Applecross and a significant 25% drop in available stock in Mount Pleasant. The number of available listings per suburb at the end of May are:
Alfred Cove: 2
Applecross: 69
Ardross: 12
Attadale: 13
Bicton: 11
Booragoon: 8
Melville: 7
Mount Pleasant: 38
Myaree: 3
Closing Remarks
Perth’s real estate market continues to boom with rising prices and high demand, closing the gap with the median dwelling values of the top capital cities. Last month, Brisbane overtook Melbourne in the race for second place, with Perth now just $50,000 below Melbourne’s median values.
I’m hearing from some homeowners and buyers in the market that they feel the market is overheated and a price decline is coming soon. To those that feel this way, I say this:
Don’t forget that Perth is still a highly affordable capital city compared to the others. Our rental market is tight, and the overall state economy remains strong. Not to mention, we would need to more than triple the current level of stock to meet long term average supply levels and we are not creating enough new stock to cater for the influx of demand from current population growth, let alone local demand. What happens to the market when interest rates start to decline? We would all expect demand to further strengthen. All you can do is play the probabilities and percentages as no one out there can pick market tops and bottoms with certainty. The probabilities all point to strong price growth over the next 12 months, and this very well may continue beyond that. Besides, the long-term market direction is always up, so unless you are wanting to short term trade property, small 5-12% price movements starts to become inconsequential over a 10-20 year time frame.
Stay tuned next month to see if Perth climbs even higher.
