Market Minute - with Peter Peard

11 Apr 2024

Despite the challenge of higher interest rates impacting affordability, the property market in Perth is gearing up for substantial growth. According to the latest insights from the Residential Property Prospects report by Oxford Economics Australia, released on Monday, Perth is expected to outpace other states and territories with a predicted price surge of 30% by 2027.

This surge is underpinned by two critical factors: a fundamental shortage of dwellings and a continuously growing population. In 2024 alone, the median house price is forecasted to rise by 12.9%, indicating a robust market trajectory despite economic headwinds.

The report highlights Western Australia's population growth, which has been steadily climbing at a near-record rate of 3.3%, reaching over 2.9 million by September 2023. However, dwelling completions have lagged behind, failing to meet the demands of the burgeoning population. As a result, prospective homeowners are increasingly turning to the established housing market, intensifying competition and driving up prices.

Lisa Johnson, a prominent figure in the real estate industry, sheds light on the dynamics at play: "WA's population continues to increase at near-record rates. Dwelling completions are well below what's needed to accommodate these additional households, leading people to compete for established homes."

The data underscores this trend, with house prices soaring by 12.7% year-on-year, while unit prices also experience a significant uptick of 5%.

Despite concerns over affordability exacerbated by rising interest rates, the robust demand for housing in Perth shows no signs of abating. This demand-supply imbalance creates a favorable environment for property investors and homeowners alike, positioning Perth as a hotbed for real estate opportunities in the coming years.

As the market continues to evolve, stakeholders are advised to stay vigilant and proactive, leveraging market insights and expert guidance to navigate the complexities and seize the opportunities presented by Perth's burgeoning property landscape.

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