The latest increases in Perth residential property prices, coupled with the continued low levels of stock, are further signs the market is poised for continued growth, according to Western Australian-based property investment consultancy Momentum Wealth.
Last week, figures from the Real Estate of Western Australia (REIWA) showed that 233 Perth suburbs recorded an increase in median house sales price over winter, as wet weather failed to dampen demand across the western capital.
Jennifer Wakeman, General Manager of Momentum Wealth, said the fundamentals were in place for the upswing in Perth's property market to continue.
"A drop in the total number of listings for sale, widespread skills shortages and interstate migration are all favouring market growth, with no sign that the current growth phase has run its course," Ms Wakeman said.
In August there were 8,511 total listings for sale in Perth, reflecting a 21.95% decrease compared to the same time last year, and a 40.69% drop compared to August 2019.
"We are likely to see a continued tightening of supply in Perth's residential market for some time yet," Ms Wakeman said.
Growing pressure on shrinking supply
The slow delivery of new homes promised by the spike in Perth housing approvals in the past 12 months, is a contributing factor.
"Not only is there a lag from approval to construction, but delivery is being hampered by labour constraints, as well as supply-chain constraints linked to high building demand, the needs of the mining industry and overseas building booms drawing on materials," Ms Wakeman said.
The need to fill WA's high number of job vacancies is also putting pressure on shrinking housing stocks.
The Internet Vacancy Index, sourced by Bankwest Economics Centre, shows WA has the highest rate of advertised vacancies in Australia.
As of May 2021, there were more than 45,000 advertised job vacancies in WA.
The increase in the number of projects in WA's mining/resources and construction sectors has contributed to reports of widespread skills shortages in key roles, especially machinery operators, technicians and trade workers.
"Limits on cross-border movement mean it's currently challenging to recruit interstate, but as borders open up there will be more interstate migration from skilled tradespeople and professional workers to fill roles," Ms Wakeman said.
"This in turn will increase demand for housing, tightening stock further and pushing up prices."
WA has already reported higher levels of interstate migration with people moving to Perth for work, including FIFO roles, as well returning residents on the back of COVID-19.
In the March 2021 quarter, WA returned a positive net interstate migration figure of +1,639 (ABS).
Ms Wakeman said investors were already facing stiff competition in the Perth property market, with all the signs pointing to competitive conditions for some time to come.
"On the ground, our buyer's agents are reporting low sales stock, resulting in high levels of buyer competition for high-quality properties in investment-grade suburbs," she said.
"Purchasers are often having to stand out against multiple offers from other interested parties, with some properties going under offer immediately after, or even before, the first home open."
Ms Wakeman said her team were working closely with buyers to ensure their offers remained strong in these tight conditions.
"We're working with our clients to not only ensure they're making sound investment decisions, but also to help them stand out during property negotiations with the right price and terms to appeal to sellers."
