“Even though home values have increased more than 50 per cent since the start of the pandemic – Perth home values are up 56 per cent since March 2020 – it’s still relatively cheap compared to other capital city markets,” Ms Owen said.
“In the short term, I can’t see any change to the aggressive growth in housing values, just because that supply-demand dynamic persists.”
Armadale in Perth’s south-east recorded annual value growth of 28 per cent, the highest in the country, with nearby Gosnells (27.1 per cent) and the coastal region of Rockingham (26.7 per cent) rounding out the top three.
Kwinana recorded the fourth-highest increase, jumping by more than 25 per cent, while the Serpentine Jarrahdale region recorded growth of 23.3 per cent. Swan (22.1 per cent) and Wanneroo (23.3 per cent) were the only areas in the city’s north to be represented in the top 10 growth areas.
Rents have also surged across Perth in the year to March, with houses recording a 13 per cent increase, while units jumped by 15.9 per cent. The average rental yield for the city is 4.6 per cent.
Perth’s property boom has been attributed to strong international and interstate investment since the pandemic, paired with a major shortage of homes across the state.
“The past few years have created this total flip in demand across the Perth market, which no developer, council, real estate agencies would have been expecting,” Ms Owen said.
“The story across Perth is so remarkably different to where it was in the doldrums in 2020 when it bottomed out, it’s a very dramatic change … it’s almost like we’re back in that peak mining boom period.”
Sydney-based buyer’s agent Lakhwinder Singh told The Australian Financial Review that six out of every 10 homes his clientele were currently buying were now in Perth.
Most of the investment properties were located in the city’s south, near the Garden Island naval base where the Australian government will invest billions to prepare the area to house the country’s first Virginia-class submarines, creating 3000 new jobs.
Mr Singh described the defence contracts as “the cherry on top” for east-coast investors who were already attracted to the region’s relatively affordable property prices of about $500,000 and weekly rental incomes above $500.
Ms Owen said the major factor driving growth in the southern suburbs was the cheaper prices compared with the city’s median household value of over $700,000.
“The key trend that sticks out is that the cheaper the market, generally the higher the growth rate at the moment,” she said.
