House price growth expected, supply constrained

3 October 2022
Matthew Hughes

Article by: Claire Tyrrell

Source: Business News

September 29, 2022

Western Australia was the only state to record house price growth expectations in a recent Property Council report.

Western Australians expect modest house price growth over the next 12 months, but say government must address issues impacting affordability and supply.

The Property Council of Australia’s and ANZ’s recent survey showed WA’s house capital growth expectations lifted from -1.1 index points in the previous quarter to 5.1 index points in September.

This compares to other states that showed negative readings in expected house price growth, meaning expectations were considered below neutral.

However, every state’s expecations in house price growth has taken a significant hit since the March quarter, when Perth was at 60 index points.

Property Council of Australia WA Division executive director Sandra Brewer said the latest data reflected the countercyclical nature of Perth’s property market compared with the east coast.

“We have seen an increase in demand in residential property, but supply constraints have limited the ability of industry to bring new projects to market, with limited supply and added demand pushing house prices up,” Ms Brewer said.

This follows CoreLogic data showing a slight dip in housing price index for August by 0.2 per cent, while nationally the index fell by 0.2 per cent.

Real Estate Institute of Western Australia president Damian Collins described the dip as a monthly fluctuation and said Perth’s property market was still strong.

Close to 40 per cent of WA respondents to the Property Council survey cited housing supply and affordability as the most critical issues for the state government.

“The opportunity now is for state government to address supply challenges by continuing to streamline planning processes to support expedited housing supply – an effort which is well underway with Phase 2 planning reforms announced last week,” Ms Brewer said.

Ms Brewer added that overall confidence levels in WA remained above the historical average of 123 index points, at 123, second to the ACT.

“Market optimism coupled with strong forward work schedule expectations has the potential to boost WA’s profile and make the state a beacon for talent attraction,” Ms Brewer added.

“Ensuring a healthy pipeline of new homes will help maintain Perth’s enviable housing affordability and will attract new talent to the state.”

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Written by Terry Rider and Matthew Hughes

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