Buyers will need to bump up their budgets by more than $1m in these Perth suburbs

3 months ago 6

Optimistic house-hunters eyeing off some of Perth’s premium western postcodes are hoping for a bargain it seems, with new data revealing the median search price for a house in the Cottesloe-Claremont area is more than $1 million behind the median listing price.

The data, revealed today in Domain’s Matching Demand Report, also shows the median search price for houses in South Perth and the Perth CBD are about $500,000 behind the median listing price.

Meanwhile, those looking to buy a house in the port city of Fremantle should adjust their budgets by $220,000 – the difference between median search and listing prices – and those up the road in Melville are also off by about $300,000.

The report compared the price buyers searched for when looking for properties against the amount sellers were listing them for, breaking down the results into SA3 region, as well as “urban zone” and distance to the CBD.

The gap between searched and listed prices gave an insight into buyers’ expectations against the realities of WA’s hot property market.

Buyers looking for a house within 5 kilometres from the Perth CBD were typically about $100,000 short of the median listing, according to the report – but those looking in a five to 10-kilometre radius were bang-on.

From there out, searches were higher than the average listing price. For houses 10 to 20 kilometres from the city, searches were about $11,000 above the median listing price, which grew to $60,000 above the median listing price at 30 to 40 kilometres from the city.

The report also took in searches for townhouses and units, which is where things get interesting, according to Domain’s chief of research and economics, Dr Nicola Powell, who described the situation as the “classic affordability-led story”.

“The inner part of Perth for townhouses was pretty much on par, there’s only $1000 [disparity], there’s quite balance there,” she said.

“But when you look at the middle suburbs, this is where it’s almost like buyers are willing to pay much more than what listings are in the middle suburbs of Perth, more so relative to the outer locations.

“And that says to me location is premium, but I think it also demonstrates the affordability impact of the escalation of house prices, and we know that Perth has been that absolute growth story in recent years.”

The median search price for a townhouse within 10 kilometres of Perth’s CBD was $1000 higher than the median listing price of $799,0000. However, searches for townhouses 10 to 20 kilometres from the city were $800,000, which was $50,000 higher than the median listing price of $750,000.

With houses in “middle suburbs” only on average about $20,000 higher than townhouses, Powell said she suspected buyers were steering towards newer developments.

“I also think the impacts of affordability mean that there’s probably more people considering other types of property in order to find something within their budget,” she said.

“And you know, the fact that you’ve got search prices in middle suburbs for town homes $50,000 higher than the listed price – is that also telling us that there is a pool of buyers out there that are looking for something either slightly more premium than what we are currently offering, or a different configuration?”

As for the disparity between the median search and listing prices in the Cottesloe-Claremont area, Powell said the result mirrored trends in inner-city suburbs across other capitals where there were “vast differences” in what people searched for against what was listed.

“And I think this is where you get that kind of domino effect of people priced out of a house, then starting to look to other locations or other property type in order to find something in their budget,” she said.