Perth median house price hits $800,000 for the 1st time
Perth’s property prices continue to show a strong rebound, driven by falling interest rates and a decline in the supply of established properties for sale.
This week’s newsletter reviews the latest property data indicating that Perth is trending back towards the demand and supply dynamics experienced in the first half of last year when price growth accelerated rapidly.
Figure 1 shows that Perth property prices increased by 0.25 per cent last week, similar to the previous week. Astute observers may have noticed a slight change due to CoreLogic recently revising their home value index, but the changes are minor.
The weekly growth of nearly $2,000 saw Perth’s median house price exceed $800,000 for the first time, which may raise concerns among aspiring first homebuyers that another price boom is looming.
Prices are up by nearly 2 per cent for the year, and as Figure 2 projects, Perth dwelling prices are on target for a 4.5 per cent increase in 2025. However, if the recent growth trend continues, that figure is expected to rise.
The 0.25 per cent increase last week has taken Perth’s weekly moving average to 0.09 per cent, as shown in Figure 3, which equates to an annual growth rate of nearly 5 per cent and aligns with our projected growth of 4.5 per cent in Figure 2 above.
Figure 3 reveals that the moving average is trending upward towards the 0.15 weekly average, which equates to approximately an 8 per cent annual growth. Next week, we will project the average by the end of the year. However, regardless of how you look at it, price growth has increased significantly.
There are many factors at play here, but at its core is the balance between supply and demand. Figure 4 reveals that the ratio between demand and supply is increasing. The ratio is a simple calculation of demand (weekly sales) divided by supply (weekly listings). The current ratio of 24 per cent means there is approximately one property sold for every four properties listed for sale that week. If the ratio is rising as it currently is, it means there are relatively more properties sold and fewer properties on the market, indicating the market is favouring sellers.
This week, we are going to take a closer look at the changing patterns in weekly sales and listings.
Previously, we have been demonstrating the consistency of demand for Perth’s established dwellings by using an 800-1000 weekly sales range. The range is relatively broad, allowing for seasonal variation, but Perth has consistently recorded in this range since mid-2020.
However, in Figure 5, we can see that recent weekly sales have been close to, or above, the upper 1,000 mark (green line), excluding the seasonal outliers from Easter, Anzac Day, and school holidays for consistency. While the current levels are similar to those of last year, we are curious to see what happens next, as sales fell last year; however, this year, they might be buoyed by falling interest rates.
On a side note, the drop in sales was significantly lower at Easter this year when combined with Anzac Day and school holidays compared to the same period last year.
However, what is more interesting is the decline in listings for sale this year and how the number of listings compares with the same time last year. Figure 6 demonstrates that listings fell to nearly 3,000 in the first half of 2024 but then increased sharply to more than 5,600 in the second half of the year.
Listings fell to 4,251 last week, which is still higher than last year’s low, but the trend is decreasing, and winter typically does not encourage sellers to enter the market.
The last chart, Figure 7, reveals Perth’s 2024/25 weekly price growth, and we can use it to illustrate the inverse correlation between listings and weekly price growth. The chart shows the fall in growth in the second half of the year in Figure 7, while listings increased sharply in Figure 6. We can also see the decline in listings this year in Figure 6, while price growth begins to rise in Figure 7.
If listings continue to fall through winter, price growth is likely to keep on its current positive trend.
In summary, demand is robust while supply continues to tighten, resulting in renewed upward pressure on prices. If current trends persist into winter, Perth’s property market may outperform earlier forecasts.
Reproduced with permission from:
Ryan Brierty,
in house economist from Michael Keil @ michaelkeil.com
