Following the recent cash rate increases by the RBA, media reports are predictably screaming about an Australian housing market crash – we’ve all fallen for the click-bait and read at least one of these articles. In which case, the journalist has earnt their wage by luring us in with alarming headlines, while simultaneously contributing to negative consumer sentiment. The fact is, there is not a singular Australian property market, and it is so important for our local property performance that we report on Perth real estate as a stand-alone market. Not all markets are created equal, and we are still yet to experience any real negative impact on prices here in Perth with only minor changes in the median price across Perth since July 2022.
The cash rate increases have only been used to slow the rate of inflation, however the current inflation is caused by supply chain issues and not demand. Interest rates are best used to address demand driven inflation. Using rates as a tool to address supply driven inflation is like using a sledgehammer instead of a scalpel for heart surgery, which is why these rates rises are not likely to continue over the medium to long term. The RBA does not want to cause a housing crash. They also don’t want you to stop spending in the lead up to Christmas, which is why we are already hearing talk from banking circles of a slowdown in interest rate rises starting next month.
Before a property market can start any real decline, we need more than one key driver to drop. Right now, all we have are interest rates affecting Perth. All of our other key market drivers are outstandingly positive. Unemployment, population growth, affordability, mining and the rental market are all in positive territory and overall stock across Perth is still at very low levels. Across our local areas (Melville, Applecross, Mount Pleasant, Ardross, Myaree, Booragoon, Attadale, Bicton, Alfred Cove, Palmyra), the shortage of stock appears even greater than the Perth market as a whole, and I can tell you from experience on the ground, there are still huge numbers of buyers trying to find a new home. Our last 3 local listings have received between 60 and 100 enquiries.
What does this mean for Perth? With all other key drivers in the Perth market showing strength, and of the utmost importance, the greatest affordability in the country, West Australians are the best placed in the country to manage the costs of servicing a loan. So from where I sit, we are very well placed for another round of strong growth as soon as the market realises that slowing interest rate rises will be the coming trend.
If you’re wondering where your property sits in the current market, we can provide a complimentary and obligation-free price update on your property. Get in touch on
0447 120 125 or james@mgpproperty.com.au to discuss.
