A gaping divergence has emerged between Melbourne’s and Perth’s housing markets.
According to CoreLogic’s daily dwelling values index, Perth dwelling values continue to grow at a furious pace, up 1.9% over the past 28 days.
By contrast, Melbourne dwelling values have recorded flat (0.0%) growth over the same 28-day period.
So far in 2024, Perth dwelling values have risen by 9.2%, whereas Melbourne’s have declined by 0.2% since the start of the year:
In a similar vein, since home values bottomed at the 5-city aggregate level on 29 January 2023, Perth dwelling values have soared by 25.8% versus only a 4.1% rise across Melbourne:
As illustrated in the next chart from CoreLogic, total listings in Melbourne increased by 10.6% over the year to 7 April, whereas listing numbers in Perth fell by 24.9% over the same period:
Melbourne’s auction clearance rates have also fallen this year, which is pulling down value growth:
Perth is primed for further house price appreciation.
The city is still relatively affordable despite the recent explosive growth.
The below table from PropTrack shows that Perth’s median dwelling value of $678,000 was 19% lower than the combined capital city average of $840,000.
That said, Perth has historically been a boom-and-bust market.
Between 2014 and 2019, Perth home values fell by 18% in nominal terms (more in real terms) after the iron ore market collapsed.
The next commodity price crash will likely usher in another sharp downturn.
