Perth’s Long Road to a Real Estate Boom

They both boast golden beaches, 82-degree fahrenheit summer days and glamorous waterfront real estate, but when it comes to comparing property prices there is a great divide between Perth and Sydney.

In addition to the 2,500 miles separating the two Australian cities, there is a cavernous A$700,000 (US$539,000) gulf in average house prices. But that looks set to change.

Despite Perth being 2020’s second worst-performing Australian capital city in terms of price growth, Louis Christopher, managing director of SQM Research, a residential property data firm, said recent numbers show all the hallmarks of a boom.

“Our forecast is that dwelling prices for Perth will rise by 8% to 12% this year,” he said. “We have another scenario where everything goes right with the vaccine, and everything gets back to some kind of normal in the world, then prices will rise by 10% to 15%.”

“If we are correct about that forecast, it will be the first meaningful rise Perth housing has had since 2007, or briefly between 2013 and 2014,” he added. “It’s taken a long time for the market to experience strong rises. Indeed, the median house price for Perth is actually still lower than it was in 2008, but it’s fair to say it’s offering really good value relative to other cities and relative to its recent history as well,” he said.

According to SQM Research figures, the current median asking price for detached houses in Perth is A$672,000, while apartments are A$385,000. Meanwhile, Sydney’s median sits at A$1.38 million (for houses) and A$670,000 (for apartments).

Data compiled by the Real Estate Institute of Western Australia showed that Perth’s home value index lifted 1.6% in January, and was up 3.8% compared with three months ago, currently making it the fastest growing major residential market in Australia.

Damian Collins, REIWA president and local broker with Momentum Wealth Residential Property, said the city’s property prices looked set to soar.

“The improvement experienced in the latter half of 2020 has continued into 2021, which is pleasing to see. With the pandemic continuing to impact travel and our local economy bouncing back after a challenging year, more and more West Australians are recognizing that now is the time to buy,” he said.

Article Source: Mansion Global