Powered by MOMENTUM MEDIA
the adviser logo
Growth

Rise in Perth house prices tipped for 2022

by Noemi Pamintuan-jara5 minute read

Perth’s property prices are expected to rise and creep closer to the capital city average in 2022, after being historically undervalued in comparison.

Daniel McQuillan, managing director of Nu Wealth, has predicted that “Perth house prices are set for a major national rebalancing”, similar to what happened in the market 20 years ago.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Mr McQuillan said Western Australia’s strong economy would be the key factor that will help the rebalancing take effect over the next 12 months after experiencing a slightly slower growth than other states the past year.

“The latest national figures produced by the Real Estate Institute of Australia reveal that the median house price in Perth at $520,000 was the lowest median capital city house price across Australia and 45.9 per cent lower than the national average,” he stated.

Advertisement
Advertisement

The managing director also highlighted Western Australia’s robust economy with an unemployment rate of just 3.8 per cent, the lowest in the country.

“The state economy is expected to grow by 3.5 per cent in 2021-2022 which will be the fastest in eight years, delivering a budget surplus of $2.24 billion,” said Mr McQuillan.

“An additional 51,500 jobs are expected to be created this financial year in WA with unemployment expected to remain very low over the next four years fueling the demand for workers and housing.”

Crunching the numbers, Mr McQuillan looked at the eight capital cities’ latest weighted average median house price of $961,642.

He predicted that Perth’s median home price should not be far behind the weighted national average based on Western Australia’s strong economy, implying that the city has the potential to increase its median house price by $400,000.

Perth’s median house price was almost on par with Melbourne’s in December 2013. The price deviation now sits almost $500,000 apart.

“Nu Wealth believes that the current national imbalance in Perth house prices is unsustainable and during 2022, the median house price in Perth will start to gain traction as investors appreciate the city is undervalued. This upward climb in Perth house prices should last several years,” Mr McQuillan opined.

Looking back, he mentioned, “a similar trend occurred back 20 years ago in 2002 when the median price of a Perth home climbed from $190,000 to $465,000 in 2007”.

He anticipates an uptick in Perth market activity once borders open on 5 February as people who are likely to buy relocate to the state.

For those looking to seize the opportunity in Perth, Mr McQuillan suggested looking at undervalued suburbs with high capital growth, such as areas close to the CBD, the beach, and the river.

[Related: Pandemic shakes up house price trends]

Rise in Perth house prices tipped for 2022
perth sunset ta
TheAdviser logo
perth sunset ta

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Anja Pannek CEO PLAN

Anja Pannek named MFAA CEO

The board of the Mortgage & Finance Association of Australia (MFAA) has confirmed that Anja Pannek will be the...

READ MORE
mike felton mfaa ta jdayl5

Aggregator heads reflect on Mike Felton’s legacy

Following on the news that Mike Felton is to retire next month and step down as chief executive of the Mortgage &...

READ MORE
melanie kiely afg ta mzh8zm

AFG non-executive director steps down from board

Australian Finance Group Ltd (AFG) has advised that Melanie Kiely will be stepping down from the AFG board to...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more