Western Australia’s low housing availability continues to contribute to rising property prices, and the people are not happy.
The scarcity of Perth homes to meet the demand from growing families and incoming residents from different territories has created a huge demand while the housing supply remains limited.
PopTrack Economic Researcher, Cameron Kusher, predicts an 8% to 11% jump in property prices on average for the next 12 months. This is only after following the 18.9% increase from last year, and by far the largest in the country. Nationally, prices are projected to grow by 5%.
As of lately, there are about 23% fewer houses on the Perth market compared to 2023, causing higher interest rates and rising material costs to go higher for new builds. Forcing buyers to opt for existing homes as they’re cheaper, thus a better and more sustainable option for now.
This worsens the demand for existing properties, driving up their prices and making it increasingly difficult for new buyers to enter the market.
Perth has experienced more than a decade of “fairly minimal property growth” and while the 8 to 11 per cent increase appears to be a “drastic” outlier compared to other states, prices are merely catching up.
Western Australia homes, or Perth housing, are considerably cheaper than Adelaide, Brisbane, Melbourne, and Sydney right now but it’s certainly closing the gap between those capital cities not too long from now.
The increasing price of homes affects the entire country, with the highest interest rates in 12 years hampering new developments. The federal government’s upcoming stage 3 tax cuts and a potential reduction in interest rates in 2025 are expected to further increase demand by improving borrowing and consumer buying power capacity.
However, while the tax cuts and lower interest rates might make it easier for people to buy homes, they could also contribute to another inflation of housing prices, making affordability an ongoing challenge and a race to the bottom.
