Homeowners in Perth are capitalising on the city's red-hot property market, with new data revealing sellers are achieving record-breaking profits when they sell. This trend is unfolding against the backdrop of a severe and ongoing housing crisis, highlighting the stark divide between those already in the market and those struggling to enter it.
Unprecedented Profits for Perth Sellers
A recent report from property analytics firm CoreLogic has laid bare the lucrative conditions for vendors in Western Australia's capital. The data shows that a staggering 98.8% of Perth homes sold in the first quarter of 2024 made a profit. This figure is not just high; it represents the highest profitability rate for sellers across all Australian capital cities.
The median gain for these profitable resales was an eye-watering $305,000. Furthermore, the typical hold period for these homes was 9.1 years, illustrating how long-term ownership in a rising market has paid off handsomely. In a telling sign of the market's strength, the proportion of loss-making sales was minuscule, sitting at just 1.2%, which is the lowest rate observed in over twelve years.
The Driving Forces: Shortage and Demand
This seller's paradise is being fuelled by a perfect storm of factors that constitute the current housing crisis. A critical shortage of available homes for sale and for rent is creating intense competition among buyers. Population growth, driven by strong interstate and overseas migration, continues to outstrip the supply of new dwellings being built.
CoreLogic's head of research, Eliza Owen, pinpointed the core issue. "The key reason profitability is so high in Perth is the significant housing shortage across the sale and rental market," she explained. This shortage applies upward pressure on prices, allowing sellers to command premium figures. The data confirms that units, as well as houses, are sharing in the windfall, with 96.6% of unit resales also turning a profit.
Suburbs Leading the Profit Charge
The CoreLogic report also identified the specific areas where sellers are making the most substantial gains. The top ten suburbs for median resale profit were all located in Perth's affluent western and coastal precincts. Leading the pack was the riverside suburb of Applecross, where the median profit hit an astonishing $1.175 million.
Other high-performing suburbs included:
- City Beach with a median profit of $1.055 million
- Dalkeith at $955,000
- Nedlands and Cottesloe, both with median profits exceeding $900,000
These figures underscore the immense wealth being generated in Perth's prime property corridors, far exceeding the already impressive city-wide median.
Implications for Buyers and the Broader Market
While the news is celebratory for existing homeowners, it presents formidable challenges for first-home buyers and those looking to upgrade. The record-high profits are a direct result of record-high prices, pushing the dream of home ownership further out of reach for many. The intense competition means buyers are facing fierce auctions and having to make rapid decisions, often paying above asking prices.
The situation exacerbates the rental crisis as well, with fewer affordable purchase options forcing more people to remain in the rental pool, where vacancy rates are near historic lows and rents are soaring. This cyclical problem has no immediate solution, with construction of new homes still lagging behind the underlying demand.
The CoreLogic data paints a clear picture of a two-tiered market: one group is securing significant financial windfalls, while another is being locked out entirely. For now, Perth remains a standout performer in the national real estate landscape, but the social and economic pressures of its housing shortage continue to intensify.
