UPDATE: Perth’s property market is on fire, with home values soaring 1.9% in October—the highest monthly gain since June 2023. This surge comes as the city outpaces the rest of Australia, where home values increased only 1.1% last month. The latest data from Cotality confirms that this rapid growth is driven by successive interest rate cuts and a persistent supply-demand imbalance.
The real estate firm highlights that the first of three rate cuts this year, implemented in February, marked a crucial turning point for the market. “Home values have moved through a positive inflection across most regions and have been gathering steam since then,” stated Tim Lawless, research director at Cotality.
Currently, advertised supply levels in Perth are a staggering 18% below average, contributing to the upward pressure on prices. On an annual basis, Perth ranks as the third strongest capital city market in Australia, with prices skyrocketing 9.4% to a median value of $884,471. This is significantly higher than the 5.6% increase observed across all capital cities combined.
Notably, the top performer among suburbs in the Perth metropolitan area over the past year is Belmont-Victoria Park, which saw a remarkable 13.6% increase to a median value of $873,405. Following closely is Kwinana with a 12.3% gain to $700,392. Other suburbs showing substantial growth include Armadale at 11.5% and Serpentine-Jarrahdale at 11.3%.
However, the standout performer is Albany in WA’s Great Southern region, which has experienced a jaw-dropping 22.2% increase, pushing its median value to just under $700,000. Manjimup is also emerging as a hotspot, jumping 15.5% to $625,972.
The demand for housing is further fueled by the recent launch of an expanded 5% deposit guarantee scheme for first-time home buyers, which went into effect on October 1. This initiative is expected to enhance housing demand, especially in the lower to middle price segments. “Indeed, it is the broad middle and lower quartile of the market where gains are strongest,” Cotality noted.
Looking ahead, the firm warns that the imbalance between housing demand and supply is likely to continue, with dwelling commencements and completions remaining well below the decade average. The latest data from the Reserve Bank of Australia shows that housing credit for investors has been rising at the fastest pace since June 2015, which could lead to tighter lending policies if this trend accelerates. Cotality points out that investors account for an above-average 38% of mortgage demand, and any tightening of credit conditions could dent this demand significantly.
Economists from the banking sector have shifted their outlook, no longer predicting another rate cut in 2025. The Commonwealth Bank has gone a step further, forecasting that there will be no cuts in this cycle.
With home prices soaring and demand growing, the Perth property market is a hot topic of discussion. Home buyers, investors, and industry stakeholders are urged to keep a close eye on these developments as the situation evolves.
