The 2022-23 financial year was a year of new milestones for the Perth property market.
“Despite multiple interest rate rises, 2022-23 saw house prices rise with new records set for the time to sell a property, the rental vacancy rate and rent prices,” REIWA CEO Cath Hart said.
“Resilience was the key theme for the WA property market in 2022-23 with Perth emerging as the only capital city to record moderate price growth over the financial year despite constant interest rate rises.
“This is due to our strong economy, low unemployment rate, lower than average mortgages and higher than average wages. While the rate rises have certainly impacted household spending, many people have been able to adjust to the increase in their repayments.
“Currently, we’re not seeing an increase in mortgagee sales advertised on www.reiwa.com and we’re advised banks are working with their customers to help prevent them experiencing hardship.”
The Perth house market performed better than the unit market, with the median house price rising 4.6 per cent to a new high of $555,000 over the financial year. The median unit price fell 3.2 per cent to $399,000.
Winthrop recorded the most price growth for houses, with its median increasing 25.3 per cent to $1.25 million.
Ms Hart said there were key differences in the makeup of the Top 10 suburbs for price growth to the previous financial year.
“Six of the suburbs in this year’s Top 10 were under the median house price whereas last year none were under the median house price and nine were priced over $1 million,” she said.
“All the suburbs on last year’s list recorded growth of more than 26 per cent, while this year none saw that level of growth and only three recorded growth over 20 per cent.
“The WA market has seen moderate growth overall and very strong growth in some suburbs, however the rate of growth has slowed over the past 12 months.
“It’s not a concern, as steady growth is preferable to significant jumps in prices.
“What I would say to people who look at their suburb and perhaps notice a decline in its median price this year is to look back over previous years. It may have seen exceptional growth a year ago and is just coming down off a high. They can review the trends on www.reiwa.com.”
In the unit market, Bibra Lake was the top performer, with its median rising 32.6 per cent to $315,000. Booragoon also recorded growth over 30 per cent.
Notably, half of the suburbs in the top 10 for unit price growth were under the median unit price.
Ms Hart said 2022-23 was a year that saw houses sell incredibly quickly, with a new monthly record of a median 10 days on market set in June.
The fastest selling suburb for houses was Leda, where homes sold in a median of five days over the financial year.
“Affordability was also a focus for buyers in 2022-23 with the end-of-year data revealing that all of the Top 10 fastest selling suburbs were well below the Perth median house price.
“It’s a big change from last year’s Top 10, where all the suburbs were over the Perth median house price at that time – the rise in interest rates has cleared played a role in this trend.
“While buyers have acted swiftly when they found a suitable house, they were also being prudent.
“They’ve seen their borrowing capacity reduced significantly in the past year, so this outcome signals they’re factoring in the possibility of more rate rises and are spending wisely.”
Baldivis was the fastest selling suburb for units, with a median 12 days on market for the financial year.
Perth rent market
Records were also set in the rental market during the 2022-23 financial year.
“Demand has continued to be high, and coupled with low supply, has seen rent prices hit a new record for WA over the past 12 months,” Ms Hart said.
“The median rent for the month of June rose to $580 per week for houses and $530 per week for units.
“The rental vacancy rate reached a 42-year low of 0.6 per cent in December and has been 0.7 per cent for nine of the past 12 months.
“Given ongoing stock shortages and sustained demand from new interstate and overseas arrivals, we expect these trends to continue into the first half of the 2023-24 financial year.
“Real estate agents, builders and developers are reporting increasing interest from Eastern States investors so in the medium term we expect to see a moderate increase in supply and an easing in the vacancy rate.”
Ms Hart said Perth’s relatively affordable housing and strong rental yields have been key factors in attracting Eastern States investor interest.
While houses out-performed units in terms of median sale price growth, units came to the fore for rental yield according to www.reiwa.com data.
“The Top 10 suburbs for units all recorded yields above the number one suburb for houses,” Ms Hart said.
“This is likely to be a reflection of the lower sale price growth of the unit market compared to houses in a rising rent environment.
“Perth does offer good opportunities for investors with every suburb in both Top 10 lists were very affordable.”
Ms Hart said these results come after CoreLogic yesterday named Perth “one of the best investment opportunities around the country” due to its strong rental yields, affordability and strong prospects for capital growth, however they also noted that investment activity remained below expectations.
Bayswater was a stand-out performer for yield with a median unit sale price of $243,000 and a median weekly rent price of $450 leading to a yield of 9.6 per cent.
Jolimont recorded the most rent price growth for units in the year to June 2023. Its median rent was $495, 41.4 per cent higher than its 2021-22 median. Shelley recorded the most rent price growth for houses. Its financial year median rose 38.5 per cent to $665.
Properties rented quickly in 2022-23 with the median leasing time hovering around two weeks.
Coolbellup was the fastest leasing suburb for houses, with properties leasing in a median 11 days over the year to June. Glendalough was the fastest leasing suburb for units with a median of 10 leasing days across the financial year.
Sourced from REIWA