Perth has the weakest house price increases in the capital in 2021 and is below the 2014 peak

Australia’s most cut-off capital has had the slowest growth in house prices in 2021 – and values ​​remain below a peak seven years ago.

Perth house price increases – on a monthly and annual level – are the weakest among the state capitals, with values ​​rising by only half that of Sydney.

The city is also Australia’s most isolated capital, not just geographically, where the Western Australian government now considers visitors from New South Wales and Victoria to be “extreme risk”.

People from Queensland and South Australia are classified as ‘high risk’ as Omicron cases rise on the east coast.

While house price records continue to be set across Australia, Perth’s median house price is still below a high of seven and a half years ago.

Australia's most cut-off capital has had the slowest growth in house prices in 2021 - and values ​​remain below a peak seven years ago.  Perth house price increases - on a monthly and annual level - are the weakest among the state capitals, with value increases only half of Sydney (pictured are walkers at Cottesloe Beach)

Australia’s most cut-off capital has had the slowest growth in house prices in 2021 – and values ​​remain below a peak seven years ago. Perth house price increases – on a monthly and annual level – are the weakest among the state capitals, with value increases only half of Sydney (pictured are walkers at Cottesloe Beach)

CoreLogic’s head of research in Australia, Eliza Owen, said despite a recovery that began in 2019, Perth’s median house price was still 2.4 per cent below a record set in June 2014.

The difference in house prices is rising

SYDNEY: Up 1 percent in November and 30.4 percent during the year to $ 1,360,543

PERTH: Up 0.2 percent in November and 14.8 percent during the year to $ 552,158

ADELAIDE: Up 2.6 percent in November and 23.9 percent during the year to $ 608,624

HOBART: Up 1.2 percent in November and 26.6 percent during the year to $ 726,779

BRISBANE: Up 3.2 percent in November and 27.9 percent during the year to $ 757,194

DARWIN: Down 0.5 percent and up 14.8 percent during the year to $ 562,900

MELBOURNE: Up 0.6 percent in November and 19.5 percent during the year to $ 986,992

CANBERRA: Up 0.8 percent in November and 27.2 percent during the year to $ 999,755

Source: CoreLogic

Real estate analyst John Lindeman said the evidence showed the population did not have much to do with house price increases.

“Even when we compare price performance in capitals with similar housing prices and population sizes as Perth and Adelaide, we quickly discover that their performance can be very different,” he said.

‘Perth’s housing market growth appears to be over, while Adelaides’s gain strength.’

Perth’s median house price rose by just 0.2 percent in November and by 14.8 percent during the year to $ 552,158, CoreLogic data showed.

By comparison, Sydney’s median house price rose 1 percent last month to an annual increase of 30.4 percent to an even more unaffordable $ 1.361 million.

At first glance, Sydney, with a population of 5.3 million people, has more than double Perth’s 2.1 million.

But Hobart, with 240,000 people, saw house prices rise 1.2 percent last month in November to a year-over-year increase of 26.6 percent, bringing the average house price to $ 726,779.

Adelaide, with 1.4 million people, saw its house prices rise by 2.6 percent in November to an annual increase of 23.9 percent to $ 608,624.

Brisbane’s midway house price last month rose 3.2 percent to an annual increase of 27.9 percent to $ 757,194 in a city of 2.5 million people.

Darwin, home to 147,000 people, was the only capital where prices fell last month, with the average value of homes falling 0.5 percent to an annual increase of 14.8 percent to $ 562,900.

But Mr Lindeman said it was wrong to assume that smaller markets were automatically more volatile.

The city is also Australia's most isolated capital, not just geographically, where the Western Australian government considers visitors from New South Wales and Victoria to be 'extreme risk' with Queensland and South Australia classified as 'high risk'.

The city is also Australia’s most isolated capital, not just geographically, where the Western Australian government considers visitors from New South Wales and Victoria to be ‘extreme risk’ with Queensland and South Australia classified as ‘high risk’.

“Other experts argue that it is a small market size that causes price volatility because even small changes in buyer demand can lead to large changes in prices,” he said.

‘But house price data for our two smallest capitals by size, Hobart and Darwin, clearly show that Darwin’s housing market has experienced far more volatility and even become negative, while Hobart continues to offer strong price growth to the city’s property owners.’

In addition to having the weakest annual growth among the capitals of the state and territory, the economies of Perth and Darwin are also more tied to the resources of the resource sector.

Western Australia’s population growth may fluctuate with the price of iron ore, while the upper end of the Northern Territory is linked to liquefied natural gas.

“While market size and property prices obviously have an effect on demand, the real reason for price changes is the relationship between supply and demand,” Lindeman said.

‘As long as the supply of properties on the market is less than the demand for them, prices will rise.’

While house price records continue to be set across Australia, Perth's median house price is still below a high from seven and a half years ago (pictured is Western Australian Premier Mark McGowan)

While house price records continue to be set across Australia, Perth’s median house price is still below a high from seven and a half years ago (pictured is Western Australian Premier Mark McGowan)

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