Perth Property Prices Soar by Over $346,000 in Five Years, Marking Australia’s Strongest Capital City Growth, Yet Still Trails the Unprecedented 2000s Mining Boom
Perth’s residential property market has witnessed a remarkable resurgence since the onset of the COVID-19 pandemic, delivering the most substantial capital growth among all Australian capital cities over the past five years. According to the latest data from CoreLogic, the median home value in Perth has surged by an impressive $346,477 between April 2019 and April 2024, representing a significant 75% increase. This robust performance underscores the strength and resilience of the Western Australian housing market in recent times.
CoreLogic economist Kaytlin Ezzy highlighted the exceptional growth, stating that Perth’s market has outpaced all other capital cities in terms of percentage and dollar value increases over this five-year period. This surge reflects a confluence of factors that have created a highly competitive environment for prospective homebuyers.
However, while the current boom is undeniably significant, it still falls short of the extraordinary growth experienced during the peak of the mining boom in the 2000s. In the five years leading up to September 2006, Perth’s median home values nearly doubled, demonstrating the sheer scale of the price inflation driven by the resources sector at that time. This historical comparison provides crucial context, illustrating that while the recent gains are substantial, the earlier boom was of an even greater magnitude.
The primary drivers behind Perth’s recent property price surge can be attributed to a persistent imbalance between supply and demand. For an extended period, the number of properties listed for sale has remained historically low, while buyer demand has been consistently strong. This dynamic has been fueled by several factors, including:
- Strong Economic Fundamentals: Western Australia’s economy, underpinned by its crucial resources sector, has remained relatively robust, providing a stable base for housing demand.
- Interstate Migration: Following the pandemic, Perth has attracted a significant influx of interstate migrants drawn by its affordability compared to the eastern states, lifestyle, and job opportunities.
- Returning Expatriates: Similarly, many Western Australians working overseas have returned home, further adding to the demand for housing.
- Low Interest Rates (Historically): While interest rates have risen recently, the preceding period of historically low rates incentivized borrowing and increased buyer capacity.
- Limited New Construction: Constraints in the construction industry, including supply chain issues and labor shortages, have limited the addition of new housing stock, exacerbating the supply shortage.
An analysis of regional performance within Perth reveals that certain southern suburbs have experienced particularly strong growth. Areas such as Camillo, Armadale, and Cooloongup have recorded some of the most significant percentage increases in median home values over the past five years. This localized growth often reflects factors such as relative affordability compared to inner-city areas, infrastructure development, and local amenities.
While the recent market conditions have largely favored sellers, with properties often selling quickly and above asking price, there are emerging indicators suggesting a potential shift in market dynamics. Recent data points to a gradual slowing in the pace of price growth, and properties are taking slightly longer to sell. This could indicate a move towards a more balanced market, where buyers may have more negotiating power and a wider selection of properties to choose from.
Looking ahead, the Perth property market faces a degree of uncertainty stemming from both domestic and international factors. Potential headwinds include the ongoing impact of inflation and interest rate movements, which could affect buyer affordability. Furthermore, global economic events and policy changes, such as new trade tariffs or shifts in international monetary policy, could indirectly influence market sentiment and investment decisions.
Despite these potential challenges, most market analysts believe that residential property in Perth remains a fundamentally sound long-term investment. The state’s strong economy, coupled with ongoing population growth and a historically undersupplied housing market, are expected to provide a degree of resilience. However, the era of rapid, double-digit price growth may be moderating as the market adjusts to changing economic conditions and a potential increase in housing supply over time.
In conclusion, Perth’s property market has delivered exceptional growth over the past five years, showcasing its strength in the post-pandemic era. While this boom has not yet reached the heights of the mid-2000s mining boom, the significant increase in home values underscores the compelling dynamics at play. As the market navigates evolving economic conditions, both buyers and sellers will be closely watching for signs of further shifts in this dynamic and evolving landscape.