Perth’s runaway property market may have finally peaked despite predictions it will outpace all other capitals and record double digit price growth during the next financial year.
PropTrack’s new Property Market Outlook Report has revealed prices in Perth are set to rise between eight and 11 per cent by July next year but its pace of growth will be almost half of the 18.9 per cent recorded in the current financial year to date.
In May, home prices had risen an astonishing 20.6 per cent over the year in Perth to sit at a record high. This was the strongest annual growth of all markets.
However, PropTrack economic research director Cameron Kusher said growth had started to slow a little bit over the last couple of months.
“I do think we’ve probably seen the rate of growth peak but obviously we’re still expecting it to remain pretty strong,” he said.
The more subdued outlook follows a new Hotspotting report — influential among Australian investors — which snubbed WA completely in a list of the nation’s top 50 “supercharged” suburbs despite the State making up a third of the list last year.
It prompted Hotspotting director Terry Ryder to advise frenzied interstate investors to stop their “herd mentality” buying spree in Perth and look elsewhere.
Mr Kusher echoed these sentiments when discussing the property outlook for 2025, despite Perth being tipped to once again outperform the rest of the country.
“Obviously a lot of investors have been going into Western Australia but you’ve probably missed the boat somewhat. There’s obviously still price growth there and there’s still rental growth but you’ve probably missed your opportunity now and I think the more savvy investors will be looking at opportunities elsewhere,” he said.
According to Mr Kusher, affordability is the ultimate challenge for the State but tax cuts and potential rate cuts would help boost buyers’ borrowing capacity.
“If investment goes further down, I guess that does create a bit more of an opportunity for first home buyers in the market if there’s less competition but prices are still rising a lot faster than wages so it is hard to make that leap,” he said.
According to the report, the total stock of properties for sale was still critically low in Perth, sitting 23.4 per cent lower than a year ago. This marks the greatest annual decline in choice of all capital city markets.
“Forecasting home price growth for the year ahead becomes increasingly challenging as we observe a property market that is proving to be far more resilient than anticipated. Buyer demand remains strong despite interest rates sitting at 12-year highs, borrowing capacities falling and the volume of stock for sale increasing, leading property prices to rise at a faster rate than expected,” Mr Kusher said.
2024-25 price growth forecast
Perth 8-11%
Adelaide 5-8%
Sydney 3-6%
Melbourne 3-6%
Brisbane 3-6%
Canberra 2-5%
Darwin 1-4%
Hobart 0-3%
Source: PropTrack