Australia’s housing market continues to see growth in prices, particularly in outer suburban areas like Maddington, Armadale, Gosnells, Camillo, and Calista. According to Ray White Group chief economist Nerida Conisbee, it is currently cheaper to buy established homes than to build new ones, leading to an influx of buyers into the existing housing market. These suburbs have seen price growth of more than 25% in the last 12 months, with the median unit sale price reaching $425,000, a 6.3% increase from the previous year.
In addition to rising home prices, the rental market in Perth has also been setting new records. The median weekly dwelling rent reached a high of $650 at the end of March, an increase of 8.3% from the end of December and 18.2% from the previous year. Both house and unit rents also saw significant increases over the quarter, with the vacancy rate dropping to a record low of 0.4% at the end of March. Despite signs of demand moderating in some sectors, REIWA’s Cath Hart noted that demand remains strong in more affordable price brackets, with some tenants opting to buy instead of renting.
Factors contributing to the rental market dynamics include an increase in tenant household sizes, tenants choosing to purchase homes where possible, and individuals opting to stay in family homes or move back in with family to avoid the rental market. Additionally, there has been an increase in supply with newly built homes owned by eastern states investors entering the rental market, mainly in outer-lying suburbs where there is land available for development. A large refurbishment project in Maylands has also added over 100 apartments to the rental market, providing more housing options for tenants.
As the housing affordability crisis continues to impact Australia’s housing market, experts suggest that the trend of rising prices, particularly in outer suburban areas, is likely to persist. While demand may be moderating in higher-end markets, it remains strong in more affordable price brackets. The shortage of rental listings and the record-low vacancy rate in Perth indicate the ongoing challenges faced by renters. To address this issue, efforts to boost supply through new developments and refurbishment projects are crucial in providing more housing options for tenants and easing the pressure on the rental market.
Overall, the housing market in Australia, particularly in Perth, continues to experience significant growth in prices and rents, posing challenges for both buyers and renters. The trend of rising prices in outer suburban areas is driven by factors such as the affordability of established homes compared to new construction. While demand may be moderating in some sectors, supply constraints and low vacancy rates persist, emphasizing the need for increased housing supply to meet the growing demand. Efforts to address the housing affordability crisis and provide more affordable housing options for Australians remain critical in ensuring a sustainable and equitable housing market for all.
