PERTH’S median house price is forecast to hit $600,000 by the end of the year, WA’s peak real estate body predicts.
It would give Perth the second-highest median house price for an Australian city – behind Sydney’s $655,000.
This week, Real Estate Institute of WA president David Airey raised his 2014 home price expectations from his previous estimate of $570,000.
“Perth had a strong year in 2013 with 9 per cent growth in the median residential price to $545,000,’’ Mr Airey said. “If property sales continue at the same rate or better, especially in the sub-$800,000 market, median prices will be pushed up.
“We are running out of properties under $400,000 and there is upward pressure as buyers trade up. It is quite conceivable that we will hit the $600,000 mark if sales activity continues.”
The new forecasts would mean the median house price in Perth was climbing by about $1200 a week.
The Barnett Government’s Midyear Financial Projections Statements show the median house price in Perth last year was up $41,000 over 2012. Mr Airey said the “doom and gloom merchants’’ who were predicting Australia was about to enter a property bubble did not understand WA.
He said WA continued to be a magnet for overseas buyers, who were keen to live or invest in Australia’s boom state.
Government projections show 750 people a week will move to Perth this financial year, more than 60 per cent of them from overseas.
“There has been a lot of commentary on whether Australia is about to enter – or is maybe already in – a property bubble,” Mr Airey said.
“I don’t think this is an accurate prediction and is generally made by overseas economists who have little or no on-the-ground experience at the coal face of the property market.
“Australia has a strong economy and a very strong banking and financing system.
“Just because property prices rise quickly doesn’t mean we are in a bubble.
“Overseas buyers are rushing here. That’s a big factor that pushes prices up as demand overwhelms supply.”
But the new forecasts have frightened social groups that fear home ownership in Perth is fast becoming out of reach for average West Australians.
UnitingCare West chief executive Sue Ash said 40 per cent of the community earned less than $50,000 a year.
“It is absolutely obvious that people on those incomes or less can’t afford to buy a house,” she said. “They can’t even pay rent, let alone save money for a deposit.”