WA’s leading real estate body has boldly predicted Perth’s median house price will smash new records in 2025, potentially reaching $740,000 by the year’s end.
It comes as the Real Estate Institute of WA’s latest quarterly update shows the city is on track to achieve growth of more than 20 per cent over 2024.
REIWA chief executive Cath Hart said if the market continued on the current trajectory, Perth’s median house sale price could exceed $700,000 for the first time next year.
“Currently, Perth’s median house price at the end of June was $668,000, already 11.3 per cent higher than at the end of December 2023 and 22.6 per cent higher than the previous peak of $545,000 set in 2014,” she added.
The latest forecast contradicts recent claims by prominent investor expert Terry Ryder that Perth had reached its growth rate peak and was no longer the best market for East Coast buyers to invest in.
But Ms Hart said there would need to be an unexpected change in current conditions to slow Perth dwelling price growth.
“Demand remains strong, houses continue to sell in record time and prices keep rising,” she said.
Ms Hart said the market continued to be driven by strong population growth and constraints in the building industry.
“WA recorded 3.3 per cent population growth in the year to December, which included about 79,000 net arrivals through overseas and interstate migration,” she said.
“That’s about twice the population of Baldivis, which significantly boosts the demand for housing.
“While new home starts are being now completed in quicker timeframes, Perth’s overall housing completions remain low so we have an ongoing imbalance between supply and demand.”
According to data analysts PropTrack and Domain, which use different indexes to calculate their medians, Perth’s median has already exceeded $700,000.
Ms Hart said the median unit sale price was also expected to hit a new record in the coming quarter. “After seeing little growth for most of 2023, the median unit sale price has recorded 8.3 per cent growth since December to reach $445,000 at the end of June,” she said. “This is just $5000 below the previous peak of $450,000 set in 2014 and if the current trend continues it will exceed this very soon.”
Limnios Property Group managing director James Limnios also believes the Perth property market has a way to go before it runs out of steam, even predicting a second locally driven property boom once interest rates start to fall as predicted next year.
He said that the boom in Perth dwelling prices over the past financial year had increased the collective wealth of Perth property owners by more than $143 billion.
“Over the past year, the Perth property market has benefited from eastern states investors flooding the local property market and pushing up property values, especially in lower-priced suburbs,” he said.
“The lower priced suburbs in Perth such as Armadale have recorded some of the highest capital growth rate figures in Australia with an annual capital increase of nearly 40 per cent over the past year.”
However, Mr Limnios is predicting that from 2025 onwards, local upgraders in the Perth property market will have a major impact on property values as they now have the increased equity to purchase more expensive homes.
“As a result, we should see much stronger price rises broadly across middle to upper-priced properties in Perth that have not benefited from the eastern states invasion as much compared to lower-priced homes over the past year,” he said.
Mr Limnios also watered down Mr Ryder’s subdued predictions for the Perth market.
“These eastern states commentators do not understand that the Perth real estate market is only in the first stages of an upward correction following nearly 10 years of stagnant or negative growth,” he said.
“In reality, the Perth real estate market is just in the early stages of a price catch-up with the eastern states markets that will last for a number of years to come.”
