The Perth market is an example of how misleading – and indeed worthless – are the price figures published by research firms and mindlessly recycled by media.
According to most of the generalised data (one figure to describe an entire large city), Perth prices are down – but an in-depth analysis shows there are growth markets sprouting across the Perth metro area.
Domain, the ABS, SQM Research and realestate.com.au report that Perth houses prices, in annual terms, are down by between 2.2% and 3.6%. CoreLogic, always the odd one out with more negative numbers, says Perth is down 7.6%.
But our suburb-by-suburb analysis shows that those generalised figures tell us nothing that’s useful. Against a background where most of the market data depicts recovery, 40% of Perth suburbs have median prices higher than a year ago.
Overall, the Perth market is the strongest it’s been since it lapsed into downturn five years ago (in general alignment with events in the resources sector). Vacancies are down (from 4.1% a year ago to 2.9% now, according to SQM), rents are rising again (according to most sources, including rent.com.au, SQM and the REIWA) and sales activity is up (there are more suburbs with rising buyer demand than at any time in the past five years).
Recovery is under way – and this is starting to deliver price growth in some markets.
Our suburb-by-suburb analysis of 216 Perth markets shows that 85 have median prices higher than a year ago (58 have risen by less than 5% and 27 have risen 5% or more) and 131 suburbs have medians still lower than a year ago (72 are down by less than 5% and 59 have dropped 5% or more).
That means 40% of Perth suburbs have rising prices and 60% still have prices down.
Many of the locations with price growth are upmarket areas. Growth suburbs with median house prices above $1 million include Claremont (up 18%), Ardross (up 5%), East Fremantle (7%), Floreat (5%)_, Mosman Park (8%), South Perth (5%), Subiaco (7%) and West Leederville (10%). But the standout market is Mount Pleasant, where the median has risen 26% to $1.27 million in the past year.
Beyond the millionaire suburbs, growth markets include Brabham (up 21% to $395,000), Kensington (up 19% to $895,000) and West Perth (up 16% to $750,000).
There are also a number of suburbs which have recorded double-digit declines in their median prices. They are spread across the metropolitan area and the various price ranges, but a standout struggle market is the Kwinana LGA in the south, a noted affordable area for young buyers. Sales activity is down, against the general rising trend in Perth, in several Kwinana suburbs – and median prices are down in Bertram (7%), Leda (11%), Medina (6%), Orelia (17%) and Parmelia (10%). Most of these suburbs now have medians in the low-to-mid $200,000s, making it the cheapest precinct in the Perth market.
Overall, however, the data on prices across Perth is the most positive it has been in five years.
The outlook is even more optimistic when we examine sales activity. The number of suburbs with upwardly-mobile markets (53) is a record for Perth since we began our quarterly sales surveys four years ago.
The trend continues to be led by standout LGAs like Joondalup, Melville, Stirling and Wanneroo, with the Canning LGA emerging recently as a new growth contender.
This article by Terry Ryder was original published on Property Observer. You can read the original article here.