Sold for $150k more than listed: The Girrawheen home with 90 groups through at first home open
By Sarah Brookes
A growing number of West Aussies can’t find a rental, but also can’t afford to buy a home – or even if they can, can’t find a place to buy, say real estate insiders.
In just the latest illustration, a three-bedroom home in Girrawheen advertised from $600,000 has attracted 90 groups through at one home open. It received 50 offers and sold for $750,000 to an eastern states investor who could offer cash.
There are 1500 to 2000 people a week moving into WA, and we don’t have enough room for them as it is.Credit: Moment RF
Perth property expert Garth Davis said homeownership was now unreachable for many with a lack of affordability being driven by a huge shortfall of dwellings and increased demand from immigration.
“Many people can’t find rentals, so then decide to buy, and either can’t find a house to buy or have been priced out of the market,” he said.
“This problem could last for another 10 years. That’s how much time we’ll need to catch up.”
Ray White Commercial WA joint managing director Stephen Harrison said a “chicken and the egg” situation was arising from the need for more people to ease the labour shortage.
“As it stands we have 1500 to 2000 people a week moving into WA, and we don’t have enough room for them as it is,” he said.
“I’m not really sure where that supply will come from in the future.”
Harrison said the state needed workers to build more homes and apartments; however, high density apartment developments were usually only feasible in areas with high net worth demographics.
It’s not just homes for sale that are hard to find. Domain data for June showed Perth’s median rent is at a record $650 a week and the vacancy rate remained firmly a landlords’ market at 0.6 per cent, though it has eased slightly from 0.4 per cent.
The latest Rental Pain Index data for July 2024 revealed WA experienced a small decrease in extreme rental stress, from 83.7 per cent of renters to 82.7 per cent.
Suburbtrends founder Kent Lardner said Middle Swan and Herne Hill recorded the most unfavourable conditions for renters.
“The situation is dire,” he said.
”Further increases in rents and worsening affordability are expected.”
Lardner said recommendations included accelerating construction of affordable rental properties; implementing policies to support renters but not alienate investors; and linking population growth and housing policy to avoid the disconnect seen recently, which had been a major contributor to the current situation.
A spokesperson said the state government was acutely aware of the housing pressures being felt right across the country and had implemented a suite of initiatives to bring more housing online.
“In the second half of 2023, home building completions began to exceed commencements for the first time since June 2020,” he said.
“This trend has continued which means more houses are now being completed than started, which will help to ease construction delays.”
Ray White Group head of research Vanessa Rader said new construction in the west was being hampered by construction costs and a lack of tier-one builders.
“There have been some improvements in planning with the local government completely bypassed now, you just go straight to the state government,” she said.
“So planning’s not the big issue now, construction costs seem to be stabilising, but there’s still the issue of many major builders failing, so if you want to develop a property, who do you actually go and talk to?”
HIA Executive Director Michael McGowan said around 16,000 dwellings were being completed each year, up from 10,000 pre-COVID, but 9000 short of the volume of housing that would make a difference to the current housing challenges.
“Right now, the detached housing market needs more labour,” he said.
“There is a strong volume of apprentices in training currently, this needs to be maintained and supplemented in the short term with a targeted supply of skilled migrants with appropriate trade qualifications.
“There also needs to be investment in infrastructure, land and R&D that supports new building methodologies as we look to bridge the gap.”
McGowan said the high-end apartment market continued to deliver but with elevated construction costs, design complexity and risk, there still remained a lack of builders willing to build affordable developments.
Oxford Economics senior economist Maree Kilroy said Perth was running hot and according to the latest ABS Lending Indicators release WA bucked the national trend with lending up 4 per cent month-on-month.
“Interest rate cuts from early 2025, compounded by a sustained housing shortage, are set to trigger an acceleration in price growth thereafter,” she said. “However, housing affordability will place a limit of on gains.”
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