PERTH

JONATHAN CHANCELLOR

Top row: 20 Blackwall Reach Parade, Bicton Bottom row: 20 Hurdles Drive, Floreat

West side story

Confidence grows in Perth’s prestige market

A surge in interest from eastern state buyers has seen Perth’s prestige house market achieve long overdue price rises.

Longstanding unsold stock is now selling as the market has begun to catch up. Olivia Porteous from William Porteous Properties International says price increases across the Perth market started at the lower end last September and since then has seen renewed price confidence for homes above $4 million.

She pinpoints beachside Cottesloe as a favourite for buyers from the east – the suburb has seen values grow 5 per cent in the first quarter of 2021. The median house price sits close to $2.2 million, according to realestate.com.au.

Based on five years of sales, Cottesloe has seen a compound growth rate of 4 per cent for houses. There were 14 house sales over $2 million in the first quarter this year, around double the number in the same period in 2020, according to CoreLogic. “For eastern state buyers it still provides good value compared to the premium beach suburbs over east,” Porteous says.

Earlier this year Mack Hall secured the $2.95 million sale of a three-bedroom federation home in Cottesloe in 67 days, as Perth experienced a near halving of the number of days on market, according to CoreLogic. Recently he has found buyers in Cottesloe in just 23 days and 14 days respectively.

There was a surprising spike of international buying between September and December, Porteous notes, although she suggests that 2021 has seen local buyers put on edge due to missing out on good properties so they’re now increasing their spend budgets.

Ray White Dalkeith Claremont principal Vivien Yap says the additional competition from overseas and interstate buyers is often at work at the top end of the market, with a number of recent high-level sales to international and interstate buyers.

Ray White Cottesloe Mosman Park principal Jody Fewster recently secured a near $5 million sale of a riverfront property in Mosman Park to a buyer from London.

In February Porteous sold a modernist home carved into the cliffside in Bicton, across the Swan River from Mosman Park, for $7.2 million. It had been listed in March 2020 when COVID locked down Australia. The custom-built four-bedroom home, which features a lift to connect to all four levels, was bought by a local investment banker. Bacic Group built the home using an insulated concrete formwork. The 16m cantilevered facade incorporates frameless glass walls across the main living area and upper master level to take advantage of the water views.

Away from the water, Porteous sold a Floreat home in February for $3 million, just days in to its campaign. Designed by Philippa Mowbray Architects, the modern home on Hurdles Drive has four bedrooms, three bathrooms and a pool on 680sq m.

Fewster says with Perth’s rental vacancies at around 1 per cent, people are increasingly buying to live in an area they want. She notes that the lack of supply is driving up prices.

“Listing volumes are at historic lows and house sales in the March quarter are 29 per cent above the decade average,” Fewster says. “Although the March quarter saw a 5 per cent rise in prices, our values are still at August 2006 levels. We are 14.2 per cent below our June 2014 peak and Perth is now seen as affordable compared to other larger capitals.”

CoreLogic’s Tim Lawless told an industry briefing late last month that Perth was a sellers’ market. “Perth is generally considered to be in a solid and broad-based upswing,” he said.

The timing of the recovery has been credited to the reemergence of the mining boom and a lack of trades for residential building. Yap suggests the mining sector has always had a large influence on the Perth real estate market. “I would expect it to be a factor in more than 50 per cent of recent sales,” she says.

She says there is strong evidence that Perth’s prestige market is bouncing back with the average sale price rising from $2 million to $2.5 million, and there is still more growth to come.