North West property prices rise 50 per cent in just four years

House prices in regional WA have rocketed by a “scary” 55.5 per cent in just four years, according to new figures released last week. The statistics, from the latest PropTrack Market Insight using Home Price Index data, showed that prices in the North West region had seen slightly less strong growth of 50 per cent across all dwellings since March 2020 while Perth metro areas had risen by a staggering 57.3 per cent. REIWA president Joe White branded even the lower North West growth rate “too high”, saying the State had seen this kind of increase before and it had “not ended well” amid the 2007 GFC. “Two things that affect the property market are real wages growth and population growth,” Mr White said. “Now we’ve had 3.1 or 3.3 per cent population growth in WA and that’s about 75,000 people. “To put that in perspective, the Busselton local government area has 30,000. So it’s two and a half Busseltons every year. “We are at the moment connected up to a growth rate that is just plain scary.” But while the rises were “huge” Mr White said they weren’t unprecedented, with commodity prices the key factor driving demand and limiting resources available to build extra supply. “In fact, we are a little bit above where we were in the previous (house prices) peak which was 2015,” he said. “That was the end of Gorgon and Wheatstone. I mean, that was about an $80 billion adrenaline rush into us. “So it’s not unprecedented, but it’s higher than we’d like.” PropTrack senior economist and report author Eleanor Creagh also said that the pace of growth being seen in Perth, and many Perth regions, was incredibly elevated. “Looking ahead, we are expecting that Perth will probably continue to outperform and prices will likely continue to rise with that demand supply and balance remaining in play,” she said. “Many are expecting that interest rates are going to move lower later this year or early in 2025, providing a positive tailwind for activity, so we’re expecting that prices will continue to lift.” Mr White said that while everyone liked to see the value of the house they own go up, affordability was key for WA with REIWA keen to see an extra 25-30,000 houses a year built. “At the moment we are struggling to build 14,000 because we’ve lost so much labour to the mining industry,” he said. “What we want to see is a liberal supply of new housing. “I think the social responsibility we’ve got to look after here is making sure the housing is as affordable as possible. “Because once it’s not, and you rely on social housing, that comes back on the taxpayer and worse still those that are vulnerable become homeless. “And then you can set your watch by a deterioration in the education outcomes, health outcomes, the social outcomes. “Once someone loses a stable place of residence, the kids have to move school, marriage comes under pressure, there’s extra expenses with relocating to another town . . . they have to relocate to a town outside where their social network support structure is. “Very often we find those sorts of people have other issues too, they may have a disabled child, or have elderly family members. Housing supply is a very important requirement.” But why has the North West lagged behind the overall Regional WA growth rate by 5.5 per cent? Mr White said FIFO work practices went a long way to answering that question and that while mining firms had seen the benefits of having a core workforce at a mine site over COVID, the post-pandemic era had once again seen FIFO as increasingly attractive for firms and their workers. “While the resources sector is . . . hooked up to a 44-gallon drum of adrenaline as far as the State economy is concerned, people now don’t have to live where they work,” he said. “So FIFO is now actually supercharging growth in some areas but not necessarily where the mine is. “For example, a lot of these people are living in places like Busselton, Bunbury, Dunsborough, Margaret River. So you drive around the suburbs in Dunsborough now and you say to yourself, ‘where are they all working?’ And the answer is with Rio, with Fortescue and BHP. “There’s been a demographic shift in where they live. A lot of them have gone to the metro area, but a lot that were used to living in small communities prefer smaller communities. “So in other words, the growth that is generated from the mining sector does not necessarily mean that the house prices in that area (grow too) — it will push a house price (up) somewhere else.”