Perth house price growth could keep rising ‘at least 5-10 years’ and leave boom-bust cycle behind
The chief economist for the nation’s peak residential building body predicts Perth’s average property price could surpass Queensland’s within three years, as Australian Bureau of Statistics data released on Tuesday shows home values have surged to record highs.
Residential values rose 11.2 per cent in Western Australia to $816,000 in June, up from $733,000 in December.
Houses in Perth are worth more than Melbourne.
Housing Industry Association chief economist, Tim Reardon, said that growth would continue.
“Western Australians are not accustomed to seeing continuous house price growth, and that’s likely to be the scenario for at least the next five to 10 years,” Reardon said.
“Given the levels of migration we’re seeing at the moment that volume of homes that are being delivered aren’t sufficient to meet underlying demand – that will see established house prices continue to grow.”
A decrepit Gosnells property that went viral for being Perth’s cheapest stand-alone house, then sold for $500,000 cash this week – $100,000 above the asking price – highlighted the city’s supply shortage.
WA’s property market has traditionally had a boom-and-bust cycle, but Reardon believes China’s investment in other international mining markets will cause the state to enter a more traditional pricing cycle.
“The phase of mining investment that we saw over the past 20 years is not likely to continue to occur over the course of the next decade or two,” Mr Reardon said.
“We’re seeing China invest in mining infrastructure in Africa, South America and other parts of Asia in order to mitigate their exposure to the Australian market. As a consequence, that investment is occurring increasingly outside of our market.
“What we’re likely to see over the next five years is much more of a typical cycle where house prices rise, you get a short period of stabilisation, before they rise again.”
Industry forecasts from Master Builders Australia showed the nation was projected to miss the federal government’s National Housing Accord targets.
While faring better than other states, Western Australia was predicted to fall short by 15,000 in 2025, and 6000 homes by 2029.
“We’re doing everything that we can, working with the industry around residential construction to make sure that we build the homes for what is the fastest growing population in Australia,” Premier Roger Cook said on Monday.
“I’m really pleased that we’re performing better relative to other states. But we know that we will continue to have challenges in this area.”
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