Latest / The Follio Property Podcast / Perth's Highest Property Growth Since 2023 | October Market Update

Transcript

Perth's Highest Property Growth Since 2023 | October Market Update · The Follio Property Podcast

• 0:09
  Lachlan, you were wrong. Perth did 1.9%. You predicted 2%. Sometimes I'm humbled by the data race. Absolute cracker of a month for Perth. It led the way across the country where everyone saw significant growth off the back of the first home and a cap increase, but Perth leading the way at 1.9.
• 0:28
  Well, nationally, it's the highest recorded growth we've seen since 2023. Perth, very close to 2% growth. It probably wasn't a surprise. Like I said, we don't want to say we predicted it, but the data leading to that was very obvious. Yeah. Real big tailwind off the back over the last few months. Perth's done 5.4% growth for the quarter. Yep. So, you know, looking, if you annualise that, that's another 20 plus percent year that we're looking at.
• 0:55
  After a soft start, which we can see here on the data that we're going through now, the weekly Perth property price growth. That's a tongue twister. As you can see, when we look at the start of the year, we actually had some negative months. And the call was, I know there was some international hostility at that point, but the call was that maybe Perth's done. There was some media around that.
• 1:17
  It's past its peak. A lot of the investors from the East Coast pulled out of the market. Now look at this trend. You can see pretty much since March until now, it's been an upwards trend. And what we're seeing consistently is the weekly growth north of 0.4% consistently.
• 1:33
  Yep. And, you know, we said on this monthly update last month, historic listing lows, that didn't change throughout the month of October. It was always hovering around that 2,800, 2,900, below the 3,000 mark. Do you see any more stock coming on the market before the end of the year? Or you did predict on last month that you actually see it tightening even further in the spring season? What's your thoughts on where we are from stock levels? Yeah.
• 1:58
  Yeah, as you can see, it's been a downwards trend. And I think people were horrified when we spoke at the end of September that I said stock will continue to fall into spring. And I repeat that. We're going to see this fall again as we close out 2025. And this is the scariest thing. We've got 2,850 properties on the market, record lows.
• 2:18
  I can see this dipping down potentially for the first time ever close to that 2,000 mark. Why is that? Agents have probably got two to three weeks realistically to take things to market before they risk getting it too close to Christmas. Any agents that are pushing past that are probably not doing what's in the best interest for their client. So we'll see a handbrake come on the market. But what's interesting, our PropStack data, when we correlate...
• 2:43
  The amount of stock sold, the percentage of stock sold on a weekly basis is
• 2:50
  with the weekly price growth, there is a clear correlation. When more than 30% of the market sells on a weekly basis, we see more than 0.3% growth in the market. So it's really interesting to track, because everyone's talking, there's no stock on the market, there's no stock on the market. That's important, but it's the percentage of stocks selling. So when we go back and saw the lulls in the market in January, February, and March,
• 3:13
  That was because less than 20% of the market was trading. You could only see 15%, 16%, 17% of the total stock actually selling. What am I saying by that? If there's 10,000 properties on the market and only 1,000 sell, that's only 10% of the stock. And in January, February, March, we'll only see 15%, 16%, 17%.
• 3:31
  We're now consistently seeing 30%, 35%, 37% of the stock selling on a weekly basis. And when that happens, the correlation is almost a correlation of one that we'll see north of 0.3% growth for the week, which is about 2% for the month.
• 3:47
  fascinating and you look at the data that we're tracking through through prop stack and units were driving or were doing a lot of the heavy lifting in perth at the the front end of the year in terms of price growth whereas we're now actually seeing houses neck and neck with units in terms of price growth so i don't know if that's had anything to do with the lack of listings and the um i guess the amount of sales that have been produced recently but houses are really going on a run
• 4:11
  And the high end, this is the first time we've seen for almost 12 months, the real top end of the market, that north of 5 million market, have significant interest. Things trading at 10 million with multiple offers, we haven't seen that since COVID times. And there's arguments that just share markets going through a heater, gold prices are record high. So there's so much positive sentiment, not just in the property space, but in all industries. So we're seeing houses perform well, top end.
• 4:38
  Bottom end, it's the first time where you see sort of all pillars of the market performing this strongly. Haven't seen it since COVID, to be honest. And first homeowner cap increase where just for those listening in Perth, that's up to $850, where I think it was previously $600, which does open up a lot more opportunities in the market. Is that where you're seeing the most competitive price points at the minute in that sort of $650, $750?
• 5:04
  Anything under a mill, we're seeing record home open attendances, 40, 50, 60 groups through always double digit offers. So yes, we've seen an instant reply to what we knew was going to be a very hot market. Let's talk about supply. We've got some interesting data set that we're tracking at PropStack at the moment, if you want to talk through, where it's tracking building completions versus population growth. It's fascinating figures here.
• 5:27
  Yeah, it is. Like you can see here, we track this right back to 2020, so 2005. And what it is, is looking at the ratio of supply and demand through population growth versus building completions, right? And if you look at the data, everyone's like, what could call a market? When could the market tap out? When will we see potentially negative growth like we saw last cycle? Well, it takes an oversupply event. And as you can see, in 2015, we oversupplied the market
• 5:56
  900% hence why we've seen the five following years of negative growth 16,000 properties on the market and probably the toughest market Australians seen in a state level for many years where we are at the moment as you can see since 2020 we've been significantly undersupplied and just in October we had the lowest building approval month that we've seen in 12 months can you believe that it's
• 6:22
  In a market that could not be more demand for property, we had the lowest building approval numbers in 12 months. I just find that really, really difficult to believe. And the state government of Western Australia, particularly the local governments, probably have a little bit to answer for that. Compliance is still a huge problem. But let's not get into that political talk. It's just showing here clearly there's still a significantly undersupplied market for Western Australia.
• 6:50
  Let's move on to some of our prop stack data that we've got through our portal at the moment. This is a fascinating one. And I know when we're speaking with clients and trying to understand how much runway there is left in a market, do you want to talk through the runway data? Yeah.
• 7:08
  So the runway data here, Rhys, so currently giving a variable rate who's competitive at the moment. Okay, let's say Macquarie's at 5.44% for investor. 5.44% for investor. So as we take that through, so what this is tracking is the affordability index runway. So what we're looking at is seeing how much growth could potentially be in each market based on that variable rate. And let's just look at it for houses. At the moment, the clear...
• 7:33
  At the moment, the market with clearly the most amount of runway is Darwin. And Darwin's been brought up heavily in the social media world. We know there's some buyers agents that are taking strong positions. We certainly aren't for other reasons. But as you can see, there is a runway in the market. The next best of that is Perth.
• 7:50
  at that variable rate, still seeing 55% growth left in the market for Perth, for houses and for units, Perth representing 96% growth still left in the market. But now in the last week, what inflation data ticked up a full percent, just over a full percent, which has raised concerns from the RBA.
• 8:07
  Yep. And we saw the cash rate remain the same. Actually had a few punters out there saying they might actually increase by 25 bips. Be interesting to see what 25 basis points difference looks like that from an affordability runway.
• 8:21
  So let's pick it up to 5.75% if we were to see that take into effect. As you can see, it reduces the runway. Perth then slips down to 46% growth in the market. You see markets like Sydney there is into the negatives. So what does that mean? That would have a...
• 8:37
  a massive impact on a market like sydney units are still plenty of runway right we look at perth they're still with 86 percent and no clear concerns and even markets like sydney for units it's just showing the clear gap in the market between houses and units which you know makes sense in effect but in reality when there's no supply coming on the market on a national level there's still some real opportunity there
• 9:00
  So Lachlan, where do you see, look, we've got November, a couple of weeks of December to go. What's your predictions for the Perth market to end 2025 on? I think we'll see our largest growth month for the month of November for Perth. In November, we'll see north of 2% growth and we'll see listings slip below 2,600. You had it here first.