First-home buyers in Perth to hit a sweet spot in the property market for next two years

Perth’s property market will hit a sweet spot for first home buyers over the next 18 months to two years, according to a major analyst.

Hotspotting’s latest quarterly Winners and Losers report shows Perth is the only market in Australia with more suburbs with a falling or a stagnant number of sales than with rising sales.

More than half of Perth suburbs — 57 per cent — had falling sales volumes.

A further 17 per cent showed inconsistent patterns while only 26 per cent are experiencing rising sales.

The measure is often an indication of stagnating prices, or at least softening price growth. Prices drops are unlikely for most suburbs.

But analyst Tim Graham said the Perth lull was likely to be temporary, forecasting that the market would get its “second wind” in 18 months to two years time.

He said affordability issues would keep a lid on the market until late next year or early 2027, but the anticipated cut in interest rates would then renew growth, amid strong fundamentals including a good jobs market, new infrastructure and high migration.

Mr Graham compared the Perth market to the Sunshine Coast in Queensland, which boomed in 2017/2018 amid a rollout of major new infrastructure. It slowed after COVID hit and affordability constraints kicked in.

“It got its second wind and we are now calling it the hottest market in Australia,” he said.

“Over the next 18 to 24 months, we are likely to see Perth rebound too.”

The regional WA market has been relatively steady over the past 18 months, even with a minor dip in sales activity during the December quarter.

“Roughly 38 per cent of areas are currently showing positive momentum, while 36 per cent are classified as negative — indicating a fairly even performance overall,” he said.

According to Hotspotting’s Price Predictor Index, suburbs with rising demand for houses include Como, Dianella, Morley, Piara Waters and Wellard.

In the unit sector, Cannington, Leederville, Maylands, Wembley, Yokine, and West Perth were still showing signs of growth.

Regional markets where sales activity is still rising included Karratha, Kalgoorlie-Boulder, Albany, Broome and Busselton

On the flip side, weaker markets with falling sales volumes included Aveley, Balga, Butler, Cooloongup, Ellenbrook, Mt Lawley, Palmyra, Port Kennedy, Rockingham, and Waikiki.

Mr Graham noted that Baldivis — the one-time investor favourite — now had fewer than half the quarterly sales it experienced in late 2022.

Nationally, eight of the 14 market jurisdictions are deemed “winners” with rising demand, while five are considered “steady” markets with a plateau in demand.