Low listings and rentals have kept upward pressure on home and rent prices across Perth, according to the latest data.
According to CoreLogic, Perth property prices were up 0.9 per cent last month, taking the median house price to $562,550, while unit prices remained steady at $400,000.
Perth rentals also hit a fresh record high in August.
After sitting at $550 per week since March, the median dwelling rent rose to $575, with houses now renting for $600 per week and units $550 per week.
Real Estate Institute of Western Australia (REIWA) Chief Executive Officer Cath Hart said market conditions indicated more increases were likely.
“Strong demand is maintaining pressure on the market, with rental listings falling below 1700 at the end of the month,” Ms Hart said.
“They dropped below 1500 for the two weeks around Christmas and New Year, but other than that they are at their lowest levels for over a decade.
“While members are reporting a lot of activity from Eastern States buyers and builders are reporting increasing completions, supply can’t keep up with demand.
“Unfortunately, the green shoots we saw in the last two months didn’t bear fruit and under current conditions we expect the vacancy rate to tighten towards the end of the year.”
The suburb with the highest rent growth was Erskine, which was up 47 per cent to $515 per week, followed by North Fremantle (up 38 per cent to $900), Lathlain (up 32 per cent to $600) and Quinns Rocks (up 31 per cent to $700).
There was just 1673 properties available for rent at the end of August, a 10.2 per cent decrease from July and 12.2 per cent lower than August 2022.
While it took a median of 15 days to lease a rental during August, one day faster than July.
“In the past few years we have seen rental listings decline in the latter part of the year, so trends suggest the market will tighten towards Christmas,” Ms Hart said.
Ms Hart said supply was the major issue facing the market.
“The big lesson out of the past decade is how important it is that WA maintains its long-term average of 22,000 new home builds per year,” she said.
“We have lifted in the past few years, but this is coming off a low point after only building about 13,000 homes in 2019.”
She said there is also concern about the number of new builds in the apartment market.
Across WA, the average is 14 new builds per year, adding about 1400 apartments to supply.
Ms Hart said this year though there have been only two new starts for about 140 apartments, which will have repercussions in the next few years.
“It has been very heartening to see the state and federal governments recognise supply is the issue and work to address some of these problems, even though it will be a long-term solution,” she said.
Meanwhile, tight listings are also pressuring the sales market according to Ms Hart.
“The underlying trends suggest we can expect further growth over the rest of the year,” she said.
“The good news for prospective buyers is that the rate of growth is slowing.”
According to REIWA, the top performing suburbs for house price growth in August were Wannanup (up 4.1 per cent to $619,000), Swan View (up 2.2 per cent to $460,000), Nedlands (up 2 per cent to $2 million) Warnbro (up 1.8 per cent to $460,000) and Craigie (up 1.8 per cent to $580,000).
There were just 5170 properties listed for sale in Perth at the end of August, which was 1 per cent higher than in July, but 36.8 per cent lower than 12 months ago.
Ms Hart said properties were still selling in just 10 days, which was keeping the number of listings low.
“We are seeing properties come onto the market in reasonable numbers, but demand is high, buyers are active and anything new is snapped up quickly, in a matter of days in a number of suburbs,” she said.
She said Greenfields was one of those high demand suburbs.
“Members say this area is in very high demand, particularly from Eastern States investors,” she said.
“It’s an older area, relatively affordable, has family homes on good-sized blocks and offers good rental yields.
“Buyers are essentially on waiting lists and when a home becomes available it is sold.
“It must be noted that this activity and growth isn’t sustainable, but it reflects the heat in the market at the moment.”