Perth property prices hit record highs as east coast downswing looms

As much of Australia prepares for property prices to retreat in the face of soaring inflation and looming interest rate hikes, one capital city is quietly bucking the trend.

CoreLogic data shows median dwelling values for Perth have recently hit a new record high of $552,128 after almost eight years of decline and recovery.

Since June 2020 Perth’s dwelling values – which includes both houses and apartments – have climbed a stratospheric 24.5 per cent, eclipsing the previous record set in June 2014.

This five-bedroom family home at Mount Lawley is expected to sell for more than $2 million. (Domain / Ray White Inner North)

CoreLogic’s Head of Research in Australia Eliza Owen said it has taken 94 months for the Perth market to stage a recovery in property prices.

“As it stands, growth in the Perth dwelling market has been led by houses, with unit values still -13.6 per cent below the record high seen in September 2013,” Owen wrote in a research note.

“Recent growth in home values has been supported by a recovery in mining activity, a sub-4 per cent unemployment rate, strong jobs growth and positive interstate migration to WA since the September 2020 quarter.

“Housing market values looked as if they could be easing towards the end of 2021, but the trend rate of growth has seen a resurgence through the March 2022 quarter.”

This three-bedroom home in North Perth is expected to fetch over $1.2 million. (Domain/Acton)

Owen said given Perth has the second-lowest dwelling value of any capital city (Darwin remains Australia’s cheapest capital with a median price of $501,182) it may attract buyers looking for affordability.

“The median dwelling value in April 2022 was only $9,010 higher than the median value eight years ago,” she said.

“This relatively healthy affordability position comes after a brief period between 2006 to 2008 where Perth had the highest median dwelling value of any capital city.”

This charming two-bedder in West Perth is entertaining offers over $835,000. (Domain / The Property Exchange)

Despite its vast geographic distance from the nation’s east coast, Perth is not immune to the same economic conditions that threaten to walk back much of gains made in the housing market last year.

“While there are several tailwinds for the Perth dwelling market which suggest a continued upswing, the recent tightening of interest rates may be a blunt force for housing demand,” wrote Owen.

“Perth may eventually follow other Australian markets into a broad-based downswing as a result, just as record-low interest rates aided the recent recovery.”

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