Despite facing higher interest rates, Perth’s property market is poised for a significant growth spurt, standing out internationally.
A recent forecast by Oxford Economics Australia suggests a 30% increase in property prices by 2027, driven by a critical undersupply of homes and robust population growth.
The “Residential Property Prospects” report highlights Perth as the standout city regarding house price increases. A senior economist and the report’s author, Maree Kilroy, notes that while other major cities like Sydney and Melbourne have shown signs of price stabilization, Perth’s market has surged due to continued strong demand and decreasing housing inventory.
In 2023, Perth recorded a 14.2% rise in median house prices, the highest among Australia’s capital cities. This growth is supported by a more than 23% drop in total listings as of February 2024, underscoring a market where demand significantly outstrips supply.
Kilroy predicts that while national price momentum may slow later this year, a resurgence is expected in 2025, particularly for units, which are forecast to outperform houses. She also points to an anticipated upturn in resource investments and government spending as additional factors that will likely brighten the state’s economic outlook.
Perth’s population is expanding at a rate exceeding 3% annually, fueled by interstate and overseas migration, attracted by the strong job market and relatively affordable housing. This demographic trend sets a solid foundation for continued double-digit growth in the near term.
For 2024, the median house price in Perth is expected to rise by 12.9%, again outstripping cities like Adelaide. Kilroy emphasizes that Perth’s property market has historically experienced pronounced price cycles that significantly exceed those in other markets, suggesting a strong potential for even higher gains.
Supporting these projections, the Real Estate Institute of WA reported that Perth’s median house sale price hit a new record of $620,000 in March, with homes selling in just eight days on average. The intense competition in the housing market continues to drive prices upward, with annual increases of 12.7% for houses and 5% for units.
This robust growth, driven by a persistent housing shortage and demographic solid pressures, is expected to be further bolstered by anticipated interest rate cuts towards the end of 2024, potentially accelerating the market’s expansion into 2025.