The landscape of real estate in Perth is undergoing a significant shift, marked by a remarkable decline in property supply. The current scarcity, as indicated by the latest figures from REIWA, has paved the way for a surge in property prices, creating a dynamic and challenging market environment.
Supply Crunch in Numbers:
As of the latest statistics, the total number of properties available for sale stands at a mere 3,648. To put this into perspective, this figure represents a staggering drop from the same time last year when the market boasted 7,144 properties for sale. The contrast becomes even more pronounced when we rewind to 2019, a time when the total properties on the market were approximately 14,000.
Breaking Down the Numbers:
As of December 31 2023.
Total Houses for Sale: 1,758
Total Units for Sale: 1,030
Total Land Available for Sale: 860
Analyzing the Shift:
The drastic reduction in available properties signifies a shift in the real estate market in Perth. A supply crunch of this magnitude has far-reaching implications, with one of the most notable being the upward trajectory of property prices.
Factors Driving the Price Surge:
High Demand, Low Supply: With only 3,648 properties available, the market is grappling with heightened demand against a backdrop of low volume of stock. Buyers, eager to secure a place in this competitive environment, are willing to pay a premium, thus driving property prices upwards.
Increased Competition: The reduction in the number of properties has led to heightened competition among prospective buyers. This heightened competition is placing additional pressure on prices, making it a seller's market.
Investor Confidence: The dwindling supply has instilled confidence in property investors, anticipating strong returns in the wake of limited availability. This surge in investor interest further amplifies the demand, thereby contributing to the rise in property prices. Strong rental yields are also very enticing for property investors, both locally and interstate.
Shift in Consumer Behavior: The pandemic has reshaped the way people perceive and value their living spaces. With remote work becoming more prevalent, individuals are increasingly prioritising comfortable and spacious homes, leading to an increased demand for properties with specific features.
Conclusion:
The current real estate market is a testament to the balance between supply and demand. The stark reduction in available properties, as highlighted by the figures, has become a driving force behind the surge in property prices. As the market continues to navigate these challenging dynamics, both buyers and sellers must stay vigilant and adapt to the evolving trends in order to make informed decisions in this ever-changing real estate environment.