Perth's median house price hit a new high recently – but which houses are selling?
Perth's real estate market has been making headlines lately, with the median house price reaching a new high. This surge has sparked discussions about the driving forces behind this growth, particularly in the top end of the market and the price brackets experiencing the most significant growth.
According to research conducted by the Real Estate Institute of Western Australia, the $500,000 - $1 million price bracket has seen the most sales activity, with a steady increase over the past two years. However, sales over $1 million have remained relatively stable, while sales in the sub-$500,000 bracket have significantly declined.
Cath Hart, CEO of REIWA, said that this decline in the lower price range is primarily due to a limited number of available properties rather than a decline in demand.
“There is strong interest in the lower end of the market, and this is highlighted by how fast properties in this price range are selling,” Hart said. “The majority of the fastest selling suburbs in our end of month reports tend to be under the Perth median house price and the fastest selling suburbs for the 2022-23 financial year were all priced well below the Perth median house price. This was a big change from the previous financial year’s Top 10, where all the suburbs were over the Perth median house price at that time.”
Hart attributed this change to the rise in interest rates, which has influenced buyers to focus on affordability, serviceability, and prudent spending.
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The increased demand for lower-priced properties has led to robust price growth in the lower quartile. The lower quartile house price has risen by 8.6% to $456,000 in the year leading up to September. Similarly, the overall median house price has increased by 5.6% to $570,000, and the upper quartile house price has seen a 2.7% rise to $770,000 during the same period.
It is worth noting that the lower quartile has experienced the most substantial growth since Perth's recent market low, with a remarkable 28.7% increase since 2020. Looking back further, price growth has been relatively similar across all quartiles, with the upper quartile showing slightly stronger growth since the market's previous peak in 2015.
Hart attributed the upward pressure on prices to the competition for more affordable homes and the limited supply of properties in lower price ranges.
“As well as homeowners seeking affordability, eastern states investor interest is also focused on the lower end of the market as these homes are well-priced, particularly when compared to east coast markets, and many offer good rental yields,” she said.
