Prices, yields soaring across eclectic mix of Perth suburbs
Perth’s biggest price rises stretch across the city’s demographics, while the top ten suburbs for rental yields are all in working class suburbs.
As winter approaches, a ‘perfect storm’ of property market conditions is driving prices in a big number of Perth suburbs towards annual hikes of more than 20 per cent.
With less than five months of the year accounted for in the latest figures released by the Real Estate Institute of WA (REIWA), 20 suburbs have recorded median house sale price increases of 10 per cent or more since the start of the year.
If the current price growth was to continue unabated in 2021, wealthy suburbs such as Bicton, on the Swan river just east of Fremantle, beachside Sorrento and leafy riverside Applecross would see astonishing increases this year of 30-40 per cent this year.
The price increases were not limited to well-off established beach and riverside suburbs. Blue collar areas such as Parmelia, Medina and Orelia in the industrial heartland of the City of Kwinana have risen 10 per cent or more already this year, as have working class eastern suburbs such as Lockridge, Maddington and Redcliffe.
The REIWA data shows nine suburbs featuring a median house sale price below the Perth median house sale price of $508,000, while 11 sit above, with eight of those in the $1 million-plus price range.
REIWA President Damian Collins said the recovery of the market is widespread across Greater Perth.
“Six to eight months ago it was mainly the higher end of the market showing strong growth, but now we are seeing movement across the board,” Mr Collins said.
“Bicton has experienced the strongest price growth in the first four months of the year, with its median house price increasing 20 per cent to $1.14 million between 31 December 2020 and 30 April 2021.
“This was followed by North Beach, up 17 per cent to $1.05 million, Sorrento up 16 per cent to $1.118 million, and Applecross (up 15 per cent to $1.79 million),” Mr Collins said.
|Suburb||Median house sale price Dec 2020||Median house sale price Apr 2021||Percentage change|
|1. Bicton||$950,000||$1.14 million||20%|
|2. North Beach||$900,000||$1.05 million||17%|
|3. Sorrento||$960,000||$1.118 million||16%|
|4. Applecross||$1.56 million||$1.79 million||15%|
|5. Claremont||$1.503 million||$1.7 million||13%|
|10. Attadale||$1.165 million||$1.3 million||12%|
|12. City Beach||$1.8 million||$2 million||11%|
|13. Wembley Downs||$975,000||$1.08 million||11%|
Outer suburb yields soar
Rent yields in Perth average 4.5 per cent across the metropolitan area but investors were reaping yields up to 50 per cent higher than that in the outer suburbs.
REIWA’s list of the top ten rent yields in WA’s capital was the sole preserve of suburbs with a sale price well below the city’s median of $500,000.
Savvy investors in the southern suburb Parmelia, and in Maddington 20 kilometres southeast of the city, were reaping rent yields of 6.2 per cent and price growth so far in 2021 of 11 and 13 per cent respectively.
“There is simply not enough rental supply coming onto the market, so we expect rents to keep rising for some time,” Mr Collins told API Magazine.
As is the case in Brisbane and Adelaide, attractive rent yields are proving the icing on the cake for Perth investors, while also driving first home buyers into the property market as they forsake high rents or fail to even get a rental property as people queue for the limited vacancies available.
The economic outlook is also supporting property optimism.
WA is experiencing net positive migration despite the restrictions on international arrivals and the state’s unemployment rate of 4.8 per cent significantly better than most of the country.
|Suburb||Median sale price||Median rent price||Gross rental yield|
Mr Collins said there had been some interest “but not a tidal wave” from Melbourne and Sydney investors who are only achieving an average of around three per cent yield, compared to 4.5 across Perth.
“Driving rents and property prices up more are the Australian expatriates who are buying and renting property out until they return home, or are fuelling the rental market by renting upon their return as they look for their family home,” he said.
Perth’s market was red hot but was only a reflection of the broader national scene.
Across the country, homes in more than 30 suburbs have boomed in value, posting impressive triple-digit growth over the past five years but no Perth suburbs were even among the top ten. Half the list comprised house or unit prices in Victorian suburbs.