Waiting for Perth prices to fall could cost more than it saves

Conventional advice for anyone priced out of the property market has long been to sit tight, save and wait for prices to pull back.

And while the latest data suggests the market is cooling after a record-breaking run, the cost of waiting remains steeper than the potential reward in Western Australia.

Cotality’s latest Home Value Index showed Perth dwelling values fell 0.3 per cent over the June quarter, with June itself revised down sharply after earlier figures overstated the city’s momentum.

Perth has now slipped 0.4 per cent from its May peak. For a market that spent the best part of two years recording some of the strongest growth in the country, this is a genuine change, and it is reasonable for anyone watching from the sidelines to read it as the moment to hold off.

The rental market, however, tells a different story. Cotality’s companion Quarterly Rental Review had Perth’s vacancy rate sitting at just 1.3 per cent at the end of June – among the tightest of any capital city – with rents still climbing at 7.8 per cent annually.

Nothing in that figure suggests any easing, and a household renting while waiting for the sales market to soften further is absorbing a cost that is rising several times faster than any plausible discount they might secure by delaying a purchase.

A modest further pull-back in prices, even one running to a small percentage, is dwarfed over a year by rental growth near eight per cent on a base already above $780 a week in Perth.

Waiting is not free. It carries a cost that compounds weekly, while the anticipated saving on a purchase price remains speculative and, on the current data, considerably smaller.

Prices in Perth may well fall further, and nobody should read this as a case for rushing into an overheated market.

Sales prices and rents simply measure the same market from different angles, and right now, one of those readings is moving considerably faster than the other.

Cotality’s Home Value Index indicates gross rental yields nationally have already moved to 3.56 per cent across the combined capitals – their highest level since August 2019 – a sign the market itself is recalibrating this relationship faster than commentary has caught up with it.

Property markets have always rewarded time in the market over attempts to time it, and Perth’s current data is a reminder of why.

Chasing a lower entry price while the rental market extracts a steady, compounding cost in the meantime is a difficult trade to win, even when the headline growth figures suggest patience should be rewarded.