Is Housing Expensive in Perth?

Perth, the sunniest capital of Australia, has long been known for its relaxed lifestyle, stunning beaches, and sprawling suburbs. But when it comes to housing, is Perth truly affordable compared to other Australian cities? The cost of housing in Perth is a topic of interest for prospective residents, investors, and those considering a move to Western Australia. In this article, we’ll break down Perth’s housing market to determine whether it’s expensive and explore the factors influencing property prices.

1. Overview of Perth’s Housing Market

Perth’s housing market has experienced significant fluctuations over the years, influenced by population growth, the mining boom, and shifts in demand.

• Median House Prices: As of 2023, the median house price in Perth is around AUD $560,000. While this is higher than some regional areas, it is significantly lower than cities like Sydney (AUD $1.3 million) or Melbourne (AUD $950,000).
• Rental Costs: Renting in Perth is relatively affordable, with the median weekly rent for a house at around AUD $550 and for units at AUD $480.

For the latest housing market trends in Perth, visit CoreLogic.

2. How Perth’s Housing Costs Compare to Other Cities

To determine whether Perth is expensive, let’s compare it to other major Australian cities.

Key Takeaway: Perth is one of the most affordable capital cities in Australia when it comes to buying a home. While rents are increasing, they remain more reasonable compared to Sydney or Melbourne.

3. Factors Influencing Housing Costs in Perth

Several factors influence Perth’s housing affordability:

3.1 Geographic Size

• Perth is one of the largest cities in the world by land area, with expansive suburbs offering plenty of space for new housing developments. This abundance of land helps keep property prices relatively low.

3.2 Economic Factors

• The mining boom of the 2000s drove up housing demand, particularly in resource-driven suburbs. While the boom has subsided, its impact is still visible in some areas.
• Wages vs. Cost: Higher-than-average wages in Western Australia, particularly in mining and construction, help offset housing costs for many residents.

3.3 Population Growth

• Perth’s population growth has been slower than Sydney or Melbourne, leading to less intense demand for housing.
• However, recent migration trends have led to increased pressure on the rental market.

3.4 Lifestyle Appeal

• Perth’s appeal as a coastal city with access to beaches, parks, and sunny weather has led to growing interest in certain high-demand suburbs, like Fremantle and Cottesloe, where prices are higher than the city average.

4. Suburbs and Housing Options in Perth

The affordability of housing in Perth also depends on the location and type of property.

4.1 Affordable Suburbs

• Baldivis: Popular with families, offering large homes for a median price of AUD $450,000.
• Joondalup: Affordable apartments and townhouses with excellent public transport links.

4.2 Premium Suburbs

• Cottesloe: Known for its iconic beach, this suburb commands a median house price of AUD $2.2 million.
• Peppermint Grove: One of Perth’s most exclusive suburbs, with luxury properties averaging over AUD $3 million.

4.3 Regional Options

For those willing to live outside the metropolitan area, regional towns like Bunbury and Albany offer even more affordable options, with median house prices often below AUD $400,000.

Explore suburb profiles at RealEstate.com.au.

5. Renting vs. Buying in Perth

For those unsure whether to rent or buy, here’s a comparison of the costs:

Renting

• Advantages:
  • Lower upfront costs (no deposit or stamp duty).
  • Flexibility to move.
• Disadvantages:
  • Rising rental prices.
  • Lack of long-term stability.

Buying

• Advantages:
  • Long-term financial investment.
  • Ability to build equity.
• Disadvantages:
  • Higher upfront costs (deposit, stamp duty, legal fees).
  • Maintenance and mortgage responsibilities.

Key Takeaway: For long-term residents, buying may be more cost-effective, especially with Perth’s relatively affordable property prices.

6. Rising Rental Prices: A Growing Concern

While buying remains relatively affordable, Perth’s rental market has tightened significantly in recent years.

• Low Vacancy Rates: Perth’s rental vacancy rate is below 1%, making it one of the tightest rental markets in the country.
• Rising Rents: The increasing demand for rentals has driven up prices, with many renters struggling to secure affordable housing.

This trend has led to concerns about housing accessibility for lower-income residents.

7. The Future of Perth’s Housing Market

7.1 Population Growth

As WA’s economy continues to attract interstate and international migrants, demand for housing is expected to grow, potentially driving up prices.

7.2 Infrastructure Projects

Major infrastructure projects, like the METRONET rail expansion, are opening up new areas for development, which could help balance supply and demand.

7.3 Sustainability Trends

Green building practices and energy-efficient homes are gaining popularity, which could influence future housing costs.

8. Tips for Navigating Perth’s Housing Market

1. Research Suburbs: Look for areas that offer good value for money without compromising on lifestyle.
2. Use Government Schemes: First-home buyers can take advantage of WA’s First Home Owner Grant and stamp duty concessions.
3. Work with Local Experts: Partnering with a real estate agent familiar with the Perth market can help you find the best deals.
4. Consider Regional Options: If commuting isn’t an issue, regional towns may offer more affordable housing.

Conclusion: Is Housing Expensive in Perth?

Compared to other Australian capitals, Perth’s housing market remains relatively affordable. While prices are rising in certain areas, the city still offers a range of options to suit different budgets. For those seeking a relaxed lifestyle with spacious homes and access to stunning natural beauty, Perth represents excellent value.

Are you considering buying or renting in Perth? Share your thoughts or questions in the comments below!

See Also: How Big Is Perth Compared to London?