What to expect: Perth’s 2023 property market

Despite the interest rate rises and a moderate decline in house prices nationally, the Perth market has remained relatively resilient. August 2020 to May 2022 saw Perth’s first meaningful growth period in almost a decade. In 2022, we saw eight interest rate rises, bringing the cash rate up from a historic low of 0.10% to 3.10% by the end of the year. Yet the Perth market still offers attractive options for people to buy in affordable locations with strong future growth drivers. Let’s take a look at where to invest and what to expect in 2023.

The 4 main factors likely to dictate the Perth housing market for 2023 are ⁽²⁾:

1.     RBA Cash Rate stabilisation
We expect to see a stabilisation in the RBA Cash Rate by mid/late-year, with most economists predicting a settling around 3.5%.

2.     Continuing lack of supply
While construction costs remain at least 30% higher than pre-COVID, it’s improbable that any significant change to this will be coming soon.

3.     Affordability metrics still positive
The affordability of Perth comparative to other capital cities in Australia shows continued uplift in the current growth cycle.

4.  Migration to Perth due to record high job vacancies
Perth median rent has increased 25% over the last 2 years, and this trend is set to continue as migrants introduce competition for what rental properties are available.

Where to invest:

• If you’re currently interested in buying a home, consider acting sooner rather than later as the RBA will resume interest rate decisions from next month. Further interest rate rises could result in reduced borrowing power.
• According to Hotspotting, the following is a list of the top 10 suburbs which have identifiable growth drivers with a median house price below $500,000.

1.     Armadale

2.     Orelia

3.     Waikiki

4.     Wellard

5.     Ellenbrook

6.     Baldivis

7.     Brabham

8.     Forrestfield

9.     Hocking

10.  Joondalup

All suburbs listed have extremely low vacancy rates, noted between 0.2% and 0.5%.

Forecasted trends:

• As the population continues to grow, demand for housing should remain strong.
• Similar to 2022, sales volumes are expected to remain high.
• REIWA anticipates price growth for Perth although at a lower rate. “Perth remains the most affordable capital city by median house price, and while prices have risen in the past two years, in many areas they are still below the previous peak in 2014/15… Perth’s forecast price growth in 2023 will be supported by ongoing low supply and strong demand.” ⁽¹⁾.

If you have any questions regarding buying a home or finding a suitable loan, we’re here to help make your next property purchase effortless.

Contact us today for a free personalised consultation to set you up for a strong start to the year.

Find out more about how to invest in property.

Footnotes:

⁽¹⁾ reiwa.com.au/news/moderate-property-price-growth-expected-in-2023/

⁽²⁾ https://docs.performanceproperty.com.au/marketing/PerthPPA2023.pdf