As the year began within WA’s Western Suburbs buyers were active and bullish, a behavioural overhang reflective of the housing market conditions of the past 12 months.
There has been uncertainty surrounding interest rates and the border re-opening. This spurred the fears of long-term locals that they may be experiencing a recurrence of the market peak of 2014, which triggered a dramatic drop and prolonged stagnation period. However, this was not the case, with the Western Suburbs still performing strongly and with no signs of slowing down or the market cooling insight.
While demand was still present, supply is still the issue as most sellers are looking to buy and sell within the same market. The current market conditions have caused sellers increased difficulty in finding what they were looking for and therefore have forced their desire to sell to wait it out until more quality stock was available, perpetuating the cycle of lack of supply. REIWA data revealed that across the Perth market there were only 7796 properties for sale this quarter with only 3,961 of them houses, showing a 37% decline compared to 12,295 at the same time in 2020.
There is a certain amount of buyer frustration developing, with the combination of the opening of borders drawing more interstate buyers, the lack of quality assets, and the desire to buy into the school catchment zones before the start of school term. It has all added to the headaches buyers are facing in the Western Suburbs. To make matters even more difficult when a good opportunity comes onto the market there is an excessive buyer pool ready to act and quickly secure. In order to remove the competition buyers are prepared to pay above market value for a good quality property, which sets the precedence for pricing within the suburb. The fear of missing out and the long time periods between properties that match buyers’ requirements are largely contributing to driving prices up considerably.
Sales last 3 Months: 27
Median House Price: 1,275,000 – Increased in past 3 months by 6%
Stock on Market: 4.5% – decreased by 2.3% in the past 3 months.
Median Days on Market: 7 – decreased by 3 days in the past 3 months.
This quarter saw a lot more buyers priced out of their preferred suburbs and gravitating towards Wembley and causing an increase in competition and prices. As more buyers moved out of more expensive suburbs into Wembley, we saw consistent price growth, and upper price bracket sales became a focus where historically they were not as fully renovated the 1930s-1950s on 645sqm became a normal $2,000,000 price tag. The Wembley Primary, Bob Hawke and Shenton College Catchments continued to draw interest from not only local buyers, but also interstate. The close proximity to the CBD, Ocean, and Café strips were also contributing factors.
A key sale that highlights the increase in prices and buyer demand in Wembley was 102 Essex Street. It was on the market for less than 3 days and sold for $2.25m. It received multiple offers pre-market and only one home open once it hit the market. At the time, it was one of the highest prices for a renovated character home in Wembley after multiple low $2,000,000 sales in the space of a few months.
Expect Wembley prices and demand to continue to increase as more sellers will be inclined to sell due to the positive conditions and there still remains a large buyer pool looking for opportunities similar to 102 Essex Street.
Sales last 3 Months: 30
Median House Price: $1,942,500 – Increased by 7.3% in the past 3 months.
Stock on market: 5.1%
Median Days on Market: 10
This family-friendly blue-chip suburb saw another rise in pricing as the attraction of larger land holdings, close proximity to the beach and well-performing school catchments drew greater buyer demand. With the borders re-opening there was an influx of interstate buyers with healthier budgets, especially between the $2,500,000 to $3,500,000 price range. With prices increasing, it evitability caused many previous Floreat buyers to be priced out and forced to look at surrounding suburbs or change their requirements in order to remain in the suburb.
For example, 25 Kirwan Street sold for $3.15m after only 5 days on market. This sale has led to multiple properties coming onto the market with similar price tags and selling very quickly, thus highlighting the demand for higher-priced properties within the area.
Expect the median house price of Floreat to continue to rise significantly as higher sale prices in the area become the norm and resulting in further interest from buyers of surrounding suburbs with healthier budgets. This increased median house price will unfortunately force multiple buyers into surrounding suburbs such as Wembley.
Sales last 3 Months: 34
Median House Price: 2,257,500 – 27.8% Change in 12 months
Stock on market: 7.3%
Median Days on Market: 21
City Beach has been one of the largest movers in the past 12 months and this quarter was no different. Entry-level property pricing continued to rise dramatically with land value assets selling anywhere from $2m to $2.5m this quarter. These opportunities prove to be highly sought after by East Coast investors as the combination of large land parcels, close proximity to the beach and rental returns are too difficult to ignore. The demand for established dwellings is comfortably above $3,500,000 with City Beach notoriously never having a ceiling on prices. School catchment areas continued to be another driving force during this period with a large buyer pool between $3,500,000 and $5,000,000 looked to acquire within the Kapinara Precinct.
A great example of the demand within this price range was 20 Catesby Street. It had multiple offers and sold within 2 days on market for $4.36m. It was originally advertised for Low $4,000,000 however it had multiple families looking to enter Kapinara Primary and there hadn’t been an opportunity similar for over 18 months.
City Beach should continue to be prominent as the lifestyle aspect of the suburb continues to generate buyer demand and increase drive in prices whilst compromising of quality high end stock and large land parcels.
Heading into Winter this current lack of properties and increased demand will remain. The buyers price corrections will continue, as more people shift suburbs to suit their changes in affordability, which will see price movements within each suburb as this trend develops. Historically heading into the cooler months presents less than ideal selling conditions and a slower period on market as sellers prepare their homes for sale in time for the warmer months to maximize their profit. Buyer demand for rare A grade properties will continue to increase.