For yet another quarter in 2019, Perth was the lowest capital city on the totem pole.
It was the only capital other than Darwin to record negative growth. Property values declined by 1.7% in the three months to October 2019, according to CoreLogic, bringing the median dwelling value down to $435,119.
However, it’s not all bad news. According to CoreLogic’s Home Value Index for October 2019, the rate of decline in this market has improved over this period, as the 1.7% drop was the lowest in the past 14 months.
Moreover, the continuous downhill progression of prices has meant that housing is becoming more and more accessible for buyers – especially first home buyers. As of October, Perth had the lowest median house value of all the capital cities.
Knight Frank’s Australian Residential Development Review for the second half of 2019 indicated that while the average value of a unit in a high-density site (excluding CBDs across cities) in Australia was $84,300, in Greater Perth it was just $50,200.
The value of a standard new apartment was $8,200 per square metre as of June 2019; in the inner suburbs of Perth, buyers can get units for as low as $6,000/sqm. Those in the middle ring come in at an indicative rate of $7,200/sqm, and apartments on the outskirts go for an average of $6,100/sqm.
For buyers on the lookout for the best places to purchase units, the report highlights Perth, Claremont, Subiaco, West Perth, South Perth, Burswood, East Perth, Mount Pleasant, Menora and Scarborough as the top 10 suburbs to buy in.
Low interest rates, relaxed credit policies and greater buyer confidence have helped strengthen the performance of the national housing market. Employment in the construction industry has increased nationwide in the three months to August 2019, as per the Cordell Housing Index Price (CHIP) report for September 2019.
In Perth, construction costs recorded their biggest quarterly boost since June 2014. So while there is still weakness to work through in Perth, positive indicators are popping up to suggest that this city will bounce back.
“What we’ve seen [in Perth] over the last 18 months is a significant reduction in vacancy rates and an improvement in interstate migration,” says Propertyology managing director Simon Pressley.
SUBURB TO WATCH
WEMBLEY: Massive disparity between houses and units
In the Perth suburb of Wembley, there are two very different scenarios where houses and units are concerned.
The median house price remained above $1m despite a pattern of steady, if slow, decreases in value. By contrast, the median unit value fell below $250,000 after a drop of 12.2% in the 12 months to October 2019, continuing a trend of double-digit declines over the past five years.
When it comes to rentals, it’s the unit market that is looking better. The average rent held at $270 per week, while house rents fell by 4.9% to $580 per week. Meanwhile, the average rental yield for units was 5.6%, compared to 3.1% for houses.
Price: The median house price was still above $1m in the last quarter, while units fell to below $250,000
Rent: The average rental yield was 5.6% for units and 3.1% for houses in the year to October 2019