Australians who have plans to break into the Perth housing market are expected to pay around 10% more next year as prices sustain their growth.

 According to a prediction from the Real Estate Institute of Western Australia (REIWA), house prices in Perth are expected to increase by 10% in 2022, following the estimated 14% gain this year.

REIWA president Damian Collins said despite these expected price gains, Western Australia, overall, is still the most affordable state in the country for housing, with prices yet to catch up to their peaks in 2014 and 2015.

“Interest rate rises have the potential to slow the market in 2022. While most people are aware that interest rate rises will occur at some stage, if there are multiple interest rate rises too close together, this could reduce market activity and slow projected growth,” he said.

Mr Collins, however, noted that rate rises are unlikely to derail the market entirely.

“WA has some of the most affordable housing in the country and one of the strongest economies in the world,” he said.

“We also have very low ‘for sale’ and ‘for rent’ stock. All of these factors point to another strong year of growth.”

Perth’s sales activity reflects the current demand the market is enjoying amid the pandemic.

In fact, the average weekly reported sales so far this year sits at 865, up from 680 in 2020.

“And since the spring selling season kicked off, weekly reported sales on reiwa.com have routinely been above 1,000 per week, which demonstrates that the demand for housing in Perth is still very strong,” Mr Collins said.

This strong demand is expected to be sustained until next year, which could put upward pressure on house prices.

A good sign for buyers is the predicted increase in listings next year, as sellers seek to capitalise on the strong price growth.

However, listings are expected to remain below historic average even with the modest growth.

“Current listing levels are 11 per cent lower than they were this time last year and almost 50 per cent lower than what they were three years ago,” Mr Collins said.

“The increase in new listings to market next year should be offset by the resumption of migration once interstate and international borders open.

“As more people arrive in WA, this will add to the demand for housing and keep listings below historical averages."

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Photo by Jamar Cromwell on Unsplash.