Perth’s soaring property prices look set to continue to rise over the next 12 months, with conditions unlikely to change until more homes are built.
Limited new housing construction and a low number of properties available for sale have created a tight market. Additionally, rising material and construction costs have squeezed margins for developers, further stalling new developments.
Population growth in WA, with fewer residents leaving and more people moving in from other states, has intensified the demand for housing. High interest rates, the highest in 12 years, are also contributing to the difficulty of new housing projects. These factors suggest that housing prices in Perth are likely to remain high, with limited availability continuing to put pressure on the market.
According to PropTrack, property prices in the WA city are set to increase between 8 and 11 per cent, following growth of 18.9 per cent over the past year — the largest increase in the country. Nationally, house prices are expected to grow by about 5 per cent over the next 12 months.
PropTrack economic researcher Cameron Kusher said low housing availability continued to be a significant contributor to ballooning prices.
- Perth house prices are predicted to rise between 8 and 11 per cent in the coming year
- One economist says limited housing stock coupled with increased demand has contributed to the price hike
- It comes after a 19 per cent increase in Perth property prices over the past year
- Perth’s house prices have risen nearly $1000 a day – by far and away the most of any capital city, new major national agency data shows.
“There’s not a lot of new housing being built, and the available stock for sale in Perth is very low,” he said.
Another issue in Perth is that people aren’t listing their properties for sale, resulting in a scarce number of established properties on the market. Additionally, Western Australia’s population growth has exacerbated the stock shortage. Fewer people are leaving Western Australia for other states and territories, while more people are moving into the state, driving up demand for housing.
New builds in short supply
Currently there are about 23 per cent less houses on the Perth property market than the same time last year, with Perth experiencing the biggest annual decline of available houses across all of Australia’s capital cities.
But Mr Kusher said little was likely to change in the short term, with high interest rates and increasing material costs pushing up the price of the limited number of new homes being built.
“So, people are preferring to buy existing properties rather than new ones, as the premium for new homes is significantly higher than usual,” he said. “Margins have been squeezed because material and construction costs have risen so dramatically.”
Mr. Kusher noted that this issue is not unique to Perth. “It’s a challenge across the country. New housing isn’t being built because interest rates are the highest, they’ve been in 12 years, making new developments more difficult,” he said.
Source: PropTrack, ABC news
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