By Andrew Tillett
Perth property values climbed almost 10 per cent last year, delivering homeowners their biggest rise in five years and hitting a record high.
Figures released by property analysts RP Data-Rismark show the city has defied the slowdown in the mining industry and posted the best gains after Sydney.
With buyers being lured back to the market by historic low interest rates, the median dwelling price in Perth increased to $520,000.
During the last quarter of the year, Perth home values rose 3.9 per cent, and 1.3 per cent last month, according to RP Data-Rismark’s home value index.
The annual rise was 9.9 per cent, more than four times the inflation rate and the best result since 2009.
House values were up 10.2 per cent for a median price of $537,250. Unit values rose 6.3 per cent. The new median price is $439,000.
RP Data’s senior research analyst Cameron Kusher said Perth values measured by the index were at a record high and 3.6 per cent above their previous peak in the property cycle in April 2010.
He said the main challenges for growth this year were forecast higher unemployment and affordability constraints for Perth homebuyers.
Real Estate Institute of WA executive manager of research Stewart Darby said the Perth market had finished last year strongly and the momentum would continue.
“We’re certainly expecting to see more of the same,” he said.
“The important thing is there is strong first-homebuyer activity.”
CommSec economist Savanth Sebastian said the increase in house prices was great news to start the new year after they had gone “nowhere” for a couple of years. He said the lift in Perth property prices would not trouble the Reserve Bank and would help boost household wealth and confidence, which should encourage consumers to spend.
But Mr Sebastian cautioned that the rises might moderate over the next 12 months.
“While the discussion of a housing bubble will continue to dominate headlines, it is likely that the lifting in land sales, building approvals and new home sales should result in an increase in housing supply over the first half of the new year and overall lead to more circumspect prices gains in 2014,” Mr Sebastian said.
Across all capital cities, the average rise in values for all dwellings was 9.8 per cent. The median price for a home is $540,000.
Sydney is the only other city with record-high property prices and it remains the country’s most expensive property market. Prices soared 14.5 per cent, with the median dwelling reaching $655,250.
Melbourne’s house values jumped 8.5 per cent for the year and its median dwelling price is $563,000.
Retirement nest eggs also grew strongly last year.
SuperRatings said the median superannuation balanced option jumped 15.5 per cent, the best performing year since it began tracking funds in 2000.