Perth Property Market Update 2nd Half of 2023
In Q2 2023, Perth, which in this report captures Claremont, Swanbourne, Cottesloe, Peppermint Grove, Mosman Park, North Fremantle; recorded a median house price of $2,262,500, and a median unit price of $785,500. This is an annual (Q2 2022 – Q2 2023) growth of 5.7% for houses and a softening of -4.1% for units. On a quarterly basis (Q1 – Q2 2023) median price softened by -3.3% (house) and -9.1% (units). This is a reflection of increasing cash rates and market uncertainty, as prices have declined even with lower sales. There are new opportunities for buyers, thus an ideal time to enter the market.
Average vendor discounts between Q2 2022 and Q2 2023 have shifted to a higher premium of 4.4% for houses and swung from a discount to a premium of 0.5% for units. Market conditions in Perth have now shifted to favour sellers, as buyers must be willing to offer above the first listing price. Now is the time to sell.
Claremont recorded a house rental yield of 3.8% in June 2023, higher than neighbouring suburb Mosman Park (2.7%) but lower than Perth Metro area (4.2%). Median house rental priced increased by 6.4% in the past 12 months to Q2 2023, while the number of houses rented decreased by -2.6% decrease. Average days to let remain at a low 28 days, which confirms an undersupplied and highly demanded house rental market.
2-bedroom houses have provided investors with +8.3% rental growth annually, achieving a median rent of $650 per week.
Claremont recorded a vacancy rate of 1.2% in June 2023, which is slightly above Perth Metro’s 0.9% average. That said, vacancy rates in Claremont¥ are still below the Real Estate Institute of Australia’s (REIA) healthy benchmark of 3.0%. This suggests the area still has high rental demand and quick occupancy levels, which is beneficial for investors. The current market downturn, especially for houses, further emphasises an opportunity for investors to enter the market.