Looking at the trajectory of Perth's property market over the past five decades we can clearly see the highlighting significant economic events and their impact on housing prices.
It begins with the challenges faced in the 1980’s due to economic fluctuations, leading into a period of growth in the 1990's driven by favourable conditions and increased investment.
The early 2000’s saw a property boom fuelled by the resources sector, followed by a correction during the global financial crisis of 2008. The early 2000’s were undeniably the pinnacle of Perth’s property price boom supported by a flourishing resources sector and booming economy.
The 2010’s brought about a market correction due to the mining bust, prompting diversification and resilience in the economy. Factors such as economic performance, population growth, government policies, and infrastructure development have consistently influenced house prices.
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In late 2012, troubling signs emerged as China's economic growth slowed and commodity prices declined, signalling the beginning of the mining downturn. This downturn led to cutbacks, project delays, and closures within the mining sector, impacting jobs and investment in Perth.
The local economy suffered as businesses associated with mining or supporting resource workers faced difficulties. Consequently, the once-booming property market experienced a correction, rendering housing more affordable for buyers.
In response to these economic challenges, the government implemented initiatives to stimulate other industries such as tourism, education, and healthcare. Additionally, infrastructure development and urban renewal projects were expedited to enhance employment opportunities and rejuvenate the city.
And up prices went…
It's frequently overlooked that during the peak of the initial mining boom 15 years ago, Perth's property prices stood as the second highest nationwide.
Subsequently, Perth's median price surged towards a peak of $515,000 in late 2014, only to experience a steep decline over the following six years.
This downturn coincided with a significant domestic recession, contrary to the economic trends in the rest of the country, marked by a slump in commodity prices and significant staff cuts by major resources companies.
Despite multiple interest rate increases, the 2022-23 period witnessed a notable surge in house prices, setting new records for property sales duration, rental vacancy rates, and rent prices.
Resilience defined the Western Australian property market throughout 2022-23, with Perth emerging as the sole capital city to achieve moderate price growth over the fiscal year, despite continuous interest rate hikes.
This resilience can be attributed to our robust economy, low unemployment rates, below-average mortgages, and above-average wages. While the interest rate hikes have indeed affected household expenditures, many individuals have successfully adapted to the higher repayment requirements.
Despite fluctuations, Perth's real estate journey reflects growth, resilience, and adaptability, with ongoing transformations shaping its vibrant housing market.