Perth’s property market has been one of the strongest performers in recent years, and according to new forecasts, there could be more growth ahead.
According to NAB, Perth’s home values could jump by 13.7 per cent this year and gain another 6.2 per cent by the end of 2025.
Perth is also predicted to be one of the best performers by Westpac.
Westpac is forecasting Perth’s dwelling values to increase by 14 per cent this year, up from the 10 per cent the bank predicted in February, amid ongoing strong momentum fuelled by tight supply and less constrained housing affordability.
The two main drivers of Perth’s housing market have been the lack of supply and high levels of population growth.
In percentage terms, Perth has seen the highest levels of immigration and internal migration in the country in the past 12 months—rivalling other hotspots like Brisbane.
At the same time, listings remain incredibly low.
According to PropTrack, total listings are currently 25 per cent lower than the same time last year.
We are seeing the level of new listings increase in many locations around the country, but for Perth they are remaining flat.
Even with great selling conditions, supply can’t keep up with demand.
So what does this mean for investors interested in getting into the Perth market?
When it comes to investing in the West, we always have to be very cautious. While the headline predictions from the big banks are appealing, that’s only half the story.
We can’t just focus on the upside without considering the downside as well.
If we look back at the history of Perth property prices, we can clearly see that it is a very boom and bust market. While most property markets will have their ups and downs, Perth’s downs are particularly noticeable.
In fact, it wasn’t until the COVID boom that Perth property prices put in fresh highs after lagging for nearly a decade.
So for investors who are chasing quick gains, just be aware that they might come, but in the long term, Perth could very well experience another dramatic downturn.
While the upside is appealing, there are also other markets that offer great opportunities but without that downside risk. Brisbane might be a good example.
At the same time, there are also strategies that you could employ, such as renovations or small-scale development, that could see you achieve a 20 per cent increase in value in two years, without the risk that comes along with holding onto a Perth property.
In the Perth market, many of these gains are also coming at the very cheap end of the market. They are seeing properties that are worth $400,000 move to $500,000.
It was these exact markets that dropped 20 per cent last time they had a crash.
But the great thing about property is that there are many different ways to build wealth. You don’t need to take on the risk to achieve great results.
A professional Perth buyers agency or a Perth buyers agent can provide tailored advice and assistance, making the process less daunting.
