Perth comfortably leads the nation in home price growth in the past four years.
The WA capital has recorded a breathtaking 62.6 per cent rise in property values since the COVID pandemic started in 2020 — and it shows no signs of abating.
Across Australia, property values have increased by more than 35 per cent in the same time — but not every city has benefited equally.
Melbourne has had a bump of just 11.2 per cent, while Hobart, Canberra, Darwin and Sydney have also been vastly outpaced, not just by Perth but also Brisbane and Adelaide.
Digging into the drivers behind the “multi-speed” housing market, CoreLogic head of research Eliza Owen said there were a number of factors at play.
The fastest-growing markets were generally starting from a low-price base, with cities such as Perth and Adelaide “still playing catch up” to other capitals when looking back over the past decade, Ms Owen wrote in the report.
Some cities had managed to build more homes than others, which had helped keep a lid on price growth in places such as Melbourne.
Ms Owen said there a stronger take-up of the first-home buyer grant for new homes and the HomeBuilder scheme in Victoria, as well as a property investment boom in the mid-to-late 2010s was responsible for an influx of inner-city apartments.
Interstate migration trends were also playing a role in the multi-speed property market, with softer demand for homes in Sydney and Melbourne as NSW and Victoria lost residents to other states during the pandemic, particularly Queensland.
Ms Owen said there were reasons to expect the variety in price growth across the capital cities to hold at “relatively high levels” over the next few months.
For example, she anticipated the oversupply of homes in pockets of Melbourne and Hobart to be ongoing.
Longer term, the price gap should start to close between different cities, making capitals with slower growth look more affordable.
“This would help to stabilise capital growth trends in the likes of Melbourne, Hobart and Canberra, and possibly draw down the capital growth rate across Perth, Adelaide and Brisbane,” Ms Owen said.
A separate deep dive into the property market by PropTrack found housing markets with the strongest growth avoided downturns in 2022.
When interest rates started climbing in May 2022, home prices fell nationally before starting to recover again in 2023.
“Stock for sale has consistently shrunk in the top performing markets which has driven more competitive market conditions amid stronger demand and continued to fuel price rises in 2024,” PropTrack senior economist Eleanor Creagh said in the report.