As we step into the new year, Perth's real estate market continues its remarkable growth trajectory. An exciting forecast by REIWA indicates that housing prices in Perth are projected to rise by a staggering 10% in 2022. These statistics build on the incredible 14% price growth the region experienced in 2021. While the surge in prices may be surprising to some, it is important to note that Western Australia remains one of the most affordable states in the country, despite the substantial growth in recent years.
Perth's Unprecedented Sales Records
Last year, a record-breaking 63 suburbs in Perth achieved their highest-ever property sale prices. This phenomenal achievement can be attributed to the state's strong market conditions. Damian Collins, the president of REIWA, emphasized that these remarkable sales prices were a direct result of the highly competitive buying conditions, which were characterized by fast selling times, rising prices, and low stock. In fact, 14 of these 63 suburbs witnessed an extraordinary increase of over 20% compared to their previous highest sale prices.
Let's take a closer look at some of the suburbs that shattered records:
Baskerville: A Whopping 133% Surge
Baskerville experienced the most significant increase, with a jaw-dropping 133% surge in property sale prices compared to its previous peak in 2015. This remarkable feat showcases the strength and resilience of Perth's real estate market.
North Coogee: A Remarkable 119% Rise
Following closely in second place is North Coogee, which witnessed a remarkable 119% increase from its previous highest sale price in 2018. These skyrocketing prices indicate the tremendous growth potential of the region.
Current Housing Prices in Perth
As we move into 2022, the upward trajectory of housing prices in Perth shows no signs of abating. Experts estimate that prices will continue to rise by another 10% this year, building on the previous year's growth. Despite expectations of a slightly slower rate of growth compared to 2021, property owners in Australia remain confident that the growth will persist throughout the year.
The current median house price in Perth stands at $521,000, based on recent data. In January, Erskine emerged as the suburb with the most significant median house price growth, seeing a 4.4% increase to reach $450,000. Padbury closely followed suit with a 2.4% median price growth, reaching $615,000. Kalamunda and Harrisadale also experienced substantial growth, with increases of 2.1% and 2% respectively.
The Factors Driving the Price Surge
President Collins cited several reasons for the extremely competitive buying conditions in Perth, which have led to the surge in prices. These factors include fast selling times, rising prices, and low stock. However, it is important to explore the broader economic context that influences the housing market's fluctuation.
Like any other commodity, housing prices are primarily determined by the forces of demand and supply. In the case of Western Australia, several key factors are contributing to the increase in the housing price index, including population growth, inflation, interest rates, economic growth, and stock returns.
Low-interest rates have played a pivotal role in the surge. With lower mortgage repayments, borrowers have the opportunity to secure housing loans, thereby increasing the demand for housing. The resultant increase in demand drives the upward movement of housing prices.
Demographic factors, such as population growth and an influx of people seeking residential houses, have further contributed to the surge in prices. The high demand for housing facilities has automatically translated into increased housing prices.
Records Being Smashed in 2022
2022 has already shown promise in terms of smashing previous records. The projected 10% price increase indicates a continued upward trend this year. January witnessed the highest increase in Perth's home value index since May of the previous year, despite lower activities during the festive season.
Erskine, once again, emerged as the suburb with the most significant growth, recording a 4.4% increase during the month. Padbury followed closely with a 2.4% increase. Kalamunda and Harisdale also experienced notable growth. Furthermore, the median selling times are expected to rise to approximately 30 to 40 days this year, reflecting the intense demand for properties in Perth.
However, it is important to note a downside to this surge in prices. As the number of evictions rises, due to landlords capitalizing on the booming market, many tenants are being forced out of their homes. This has created a challenging situation as tenants struggle to find affordable housing options.
Perth's House Prices in the Near Future
According to various housing stakeholders in Western Australia, the surge in housing prices is expected to continue throughout 2022. Experts anticipate a 10% increase in housing prices from 2021. Additionally, the median house price in Perth is expected to rise between 10% to 15% this year. These projections will likely attract more investors to the housing sector and subsequently increase the availability of rentals in the market.
The strong market conditions in Western Australia show no signs of slowing down. Therefore, we can anticipate a continued surge in house prices in WA by 10% from 2021.
The Need for Affordable Housing
As the housing market evolves, it becomes increasingly challenging for many tenants in Perth to find affordable housing options. At Zest Realty, we understand the struggles faced by renters and are dedicated to helping them find affordable homes. As a reputable real estate brokerage company, we assist clients in making informed housing decisions and provide access to affordable properties. With the expected price growth and subsequent increase in evictions, the demand for residential houses will continue to rise.
If you are in search of your dream home or require assistance with your housing needs in Western Australia, do not hesitate to contact us today. We are here to help you navigate the evolving real estate landscape and find the perfect housing solution for you.