Perth Market Update April 2020
Friday, 8th of May 2020


The Perth property market showed signs of resilience through April as both the sales and rental market prices remained stable. The biggest impact observed to date has been the lower transactional volumes. Activity in both sales and leasing slowed down noticeably as investors remained patient on the side lines.



Market Analysis – Rentals


Perth’s rental conditions remained favourable for investors with a low vacancy rate of just 2.2% and a stable median rent of $360 per week.


There is currently 23% less rentals available on the market compared to this time last year, with 5,602 properties currently available for rent in Perth. This is a clear indication of a tight market with supply and demand conditions favourable for investors.


Leasing activity did decrease by 9.5% over the course of the week with 774 properties leased by REIWA members. As the WA Premier announced an easing of home open restriction last week it is expected that leasing activity will pick up again in Quarter 2 of 2020.    



Perth Rental Data as at May 04, 2020 (Source: REIWA)



Corelogic’s recent March Quarter Rental Review found the following: 

  • National rents increased 0.3% over the month of March, and 1.2% on a quarterly basis to be 1.4% higher over the year. Growth rates decelerated over the month, and are likely to experience further downward pressure amid the COVID-19 crisis. 
  • Six of the capital city dwelling markets experienced a month-on-month increase in rent values, led by Perth, where rent values rose 0.8% in March.
  • Despite signs of weakening conditions in the month of March, the overall quarter results show rental increases in all capital city regions, led by a 1.7% increase across Perth. 


A review of the change in rental listings from 22nd of March to 26th of April (Figure 2 below), found the East Coast rental market, most notably inner Sydney and Melbourne (36% and 34% respectrively), were dramatically more impacted compared to Perth (4.7%). 


This is another positive sign for Perth property investors and the imporving local rental market, despite the impacts of COVID-19.



National Change in Rental Listings 22nd March to 26th April, 2020 (Source: CoreLogic)



Market Analysis – Sales


The CoreLogic Home Value Index results as of April 30, shows “Australian housing values have not seen any evidence of a material decline in April, despite a sharp drop-in market activity and a severe weakening in consumer sentiment.” 


According to Mr Lawless, the nations two largest cities have a probaility of downside risk.  “Sydney and Melbourne arguably show a higher risk profile relative to other markets due to their large exposure to overseas migration as a source of housing demand, along with greater exposure to the downturn in foreign students, stretched housing affordability and already low rental yields that are likely to reduce further on the back of rising vacancy rates and lower rents.”


Despite housing market conditions weakning due to the effects of COVID-19 Perth is outperforming its six-month average price growth, as seen in the Table 1 below.  Three capital cities, including Perth (+0.2%), Darwin (+1.7%) and Adelaide (+0.4%), outperformed their six month average pace of growth in April, demonstrating some resilience to weaker conditions.



National Property Index Results as at April 30, 2020 (Source: CoreLogic)



According to REIWA members, there were 11,638 properties for sale in Perth as of the 4th of May, 5.8% lower than levels reported four weeks ago and 30.0% lower than levels seen a year ago. Sales activity decreased 7.2% last week with 400 reported transactions.



The Bottom Line


The types of conditions Perth is currently experiencing (low stock levels, stable rents and low vacancy rates) are all good signs for Perth investors. Whilst the national of impacts COVID-19 will certainly delay the road to recovery for WA, the data indicates this will only be a temporary blip on the radar. The biggest impact seen so far has been transactional volumes slowing down (sales and leasing), with prices remaining resilient and reversing the trend with an April monthly increase.


Despite the national economic slowdown, if Perth continues to trend in the right direction then there is plenty of reasons to remain optimistic. The road is no doubt going to have a few bumps along the way, but investors who remain patient and opportunistic are positioned to benefit from a well-deserved and prosperous road ahead.


Enjoy the ride!