Perth’s inner and coastal suburbs appear to be leading a nascent recovery in the city’s property market. (ABC News: Gian De Poloni)
House price gains in Perth’s inner and western suburbs have produced the first overall price growth for the city’s residential property market in 18 months.
- House prices have risen for the first time in 18 months in Perth
- The price increase is being led by property sales in Perth’s inner and coastal suburbs
- An analyst says there are firm signs of a recovery in the property market
During November, prices rose by 0.4 per cent in the Greater Perth region, with a median value of $470,000 for houses and $335,000 for units.
That represents the first increase since April 2018, when prices began to deteriorate amid tighter credit conditions during the banking royal commission.
CoreLogic head of research Tim Lawless said while price growth was the culmination of a gradual improvement in market conditions, there were “firm signs” the nascent recovery would become something more substantial.
“The six months leading up to November were clearly showing that the trend in falling values was losing steam,” Mr Lawless said.
According to Mr Lawless, that trend has been underpinned by two key economic drivers — jobs and population growth.
“Population is really a proxy for housing demand and we’re finally seeing, at least on June numbers … population growth back to the 10-year average,” he said.
Blue chip suburbs driving price increase
Data shows the recovery is being led by premium properties in Perth’s inner and coastal suburbs.
The “inner region” of Perth includes the western suburbs — from Mosman Park to Wembley Downs — and the northern suburbs of Mount Lawley and Mount Hawthorn.
The sale of properties in inner-city suburbs like Mount Hawthorn are leading the property recovery. (ABC News: Gian De Poloni)
“Normally during a market recovery, it is that top end of the marketplace that does move first, the blue chip suburbs where the inherent scarcity of supply generally drives demand,” Mr Lawless said.
“If we look at how values have shifted over the past month, it was that top quarter [of the market] — the most expensive 25 per cent of Perth properties — where values are up by nearly 1 per cent.”
Prices for the lowest quartile of properties in Greater Perth — the least expensive properties overall — were flat in November, while the middle 50 per cent recorded a very small drop of 0.1 per cent.
“If we do see this recovery gathering pace, I think it will probably be centred in those more expensive suburbs, but then as prices rise that growth will gradually ripple out into those more affordable areas of the market.”
Curtin University Professor of Economics Rachel Ong cautioned that it was too early to call a house price recovery in Perth, but said there were structural factors which would drive prices up in time.
“Regardless of whether this is just a blip in the trend or whether we are actually starting to see an upturn … it’s my view that sooner or later we are going to see the Perth housing market start to turn,” she said.
“Perth has now been reclassified again as a regional location for immigration purposes and that should boost population growth in the next year or so.”
The value of properties in Perth’s outer suburbs was flat in November. (ABC News: Gian De Poloni)
Even if the recovery is consolidated, Mr Lawless said it was unlikely to be a linear trend.
“I think as the market moves through the bottom of this very long down phase, we could see some further declines coupled with some modest rises,” he said.
“I don’t think the market is going to bounce back exceptionally quickly.”