The Perth property market has been in the news a fair bit over the last few months. A cost of living crisis that’s hitting particularly hard in the eastern states is prompting many to consider a sea change while Perth’s booming property market, combined with its rental crisis, has encouraged investors interstate and abroad to buy up a piece of the Perth rental market.
Given all this attention, we thought it was a great time to look at some of the Perth property market trends that are currently shaping the real estate landscape and offer our predictions on their future impact.
How the Perth property landscape is changing
Population growth
As per the Australian Bureau of Statistics’ latest release of population data, WA has the fastest-growing population in Australia – the state’s population rose to 2,905,922 between September 2022 and 2023, an increase of 3.3%. The main factor driving this has been higher-than-expected interstate and international migration. This has resulted in a booming WA economy but also ‘increased pressure on key infrastructure’, including health, education and housing.
Urban sprawl
There are many reasons for Perth’s uniquely long (150km) urban sprawl, ranging from geographical to historical and cultural. Chief among them is the understandable preference of many residents to live close to the coast, even if this means living far north or south of the city itself. Developers are incredibly adept at catering to this preference, so the sprawl shows no signs of slowing down.
This is a concern for the state’s government, with perpetual sprawl coming at both an environmental cost (land clearing, loss of biodiversity, increased car usage) and an economic one (demand for infrastructure projects to cater to new suburbs). To try and turn the tide, they announced the establishment of an Infrastructure Development Fund in February 2024, an ‘$80 million fund to unlock a new pipeline of apartment development in key urban precincts’. The aim of this fund is to help developers overcome the financial roadblocks that often make ‘medium to high density housing projects in priority infill locations within metropolitan Perth’ non-starters, and to implicitly discourage building further north and south of the city.
Residential Design Codes
Similarly, recent changes to WA’s Residential Design Codes (or ‘R-Codes’) have ushered in the state’s first planning policy to inform the development of medium density dwellings. The new policy aims to improve the way that dwellings like terrace-style homes and multiple dwelling developments are designed and built. Specifically, the new R-Codes will detail minimum requirements around natural light, tree canopies, garden size and accessibility infrastructure. Ultimately, these changes seek to increase the livability and attractiveness of medium density dwellings in more central suburbs.
Perth real estate market predictions
The University of Western Australia predicts that WA’s population growth will remain on its current trajectory throughout 2024. However, Australia is currently in the process of implementing a new Migration Strategy to crack down on ‘loopholes in the temporary migration pathways that have enabled temporary migrants to remain in Australia on an almost permanent basis’. This strategy is expected to result in ‘an increase in international skilled migration’ but is still in its nascent stages.
The combined effect of the amendments to the R-Codes and the introduction of the Infrastructure Development Fund will likely result in an increase in medium and high-density dwellings being built in more central city and suburban areas. If the stars align, this should relieve some of the population pressures currently impacting the housing market, while a focus on skilled migration will further boost the state’s economy and go some way to relieving the current skills shortages.
Do you have a question about navigating the Perth property market? We’re always keen to share our knowledge and awareness of market trends and what they could mean for you. Get in contact today, and we’ll get back to you as soon as possible!
