Perth is gaining some ground over rival cities but it still has a long way to go.
When compared with the stunning growth recorded in Sydney and Melbourne over the past 12 months, Perth is clearly a laggard, recording a drop of 1.29% in house values while Sydney and Melbourne enjoyed a 9.35% and 8.59% growth respectively.
However, the latest data from Residex suggest that Perth is gaining some ground over its eastern seaboard counterparts.
During the three months to October, median house values jumped by a solid 4.8%, higher than Sydney's 3.73% gain and even eclipsing Melbourne's 4.05% quarterly growth. In the month of October alone, median house values rose by almost 2% even as Melbourne lost more than 1%.
Land prices are also soaring in Perth. During the September quarter, median values for vacant land surged by 11% to $250,000 - a $25,000 increase in prices since June according to the Real Estate Institute of Western Australia (REIWA).
But despite the encouraging performance of late, Stewart Darby, chair of The Housing Industry Forecasting Group (HIFG) says it's too early to count on Perth returning to boom levels anytime soon.
"Recent reports predicting another housing boom and imminent land shortage are a bit premature. People tend to forget how much speculative housing was built in the last boom," he says.
John Lindeman, head of research at Residex also thinks Perth is unlikely to see similar growth recorded in the eastern seaboard states.
"The recent growth recorded in Perth suggests the worst is over. I think Perth will not grow as much as Sydney, Brisbane and Melbourne so it will resume its natural place among those cities."
Cameron Kusher, senior research analyst with RP Data agrees that Perth is more likely to see moderate growth over the near to medium term.
"Its' still quite expensive - behind only Canberra and Sydney as the most expensive market- and more expensive than Melbourne and Brisbane but with a smaller population base," he says. "I think we will see a slower but positive rate of growth across the nation. Perth probably overshot the mark when it was growing at an annual rate of 35%. I think it will grow but I don't think it will be anything to write home about."
A lot will depend a lot on what happens with the mining sectors. Projects like Gorgon LNG project help the wealth everywhere and the big mining companies have their headquarters in Perth as well.
"Perth has always been a boom/bust market," says Paul Braddick, head of property and financial system analysis at ANZ. "We've been through the boom and hopefully we're now coming out of the bust and as long China and the commodities story continue to remain strong in the next 2 years there is possibility that price growth can bounce back reasonably strongly as well."
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