Regional WA prices still rising in face of fewer eastern states investors

Bunbury was the top performing regional centre for the September 2024 quarter, according to the latest data from REIWA.

Its median house sale price rose 6.7 per cent to $555,000, up from $520,000 in the June 2024 quarter.

Bunbury also saw the most growth over the year, with the median house sale price rising 24.2 per cent.

REIWA Regional Spokesperson Joe White said a number of factors were driving price growth.

“Bunbury is attractive for a number of reasons. It is a large regional centre with good employment opportunities, medical facilities and schools,” he said.

“The Busselton Airport has been a gamechanger – you no longer have to live where you work and it has allowed many FIFO workers and their families to move to Bunbury to enjoy a South-West lifestyle.

“It is also very affordable when compared to Busselton and Dunsborough.

“Our members are reporting an increasing number of buyers who are finding these areas out of reach and are looking at Bunbury instead.”

Mr White said the $650,000-$800,000 price bracket was currently the most active part of the market.

“While the market remains competitive and prices are still rising, members are reporting that buyers are becoming more price sensitive,” he said.

“People are now viewing multiple properties before making a decision and are being very open about this with agents.

“There have been a couple of small changes in supply and demand that have led to this.

“Firstly, more properties are coming to market, which is giving people more choice and taking some of the urgency out of the buying decision.

“We can see this reflected in the median time to sell, which has risen from 12 days in the June quarter to 14 in the September quarter.

“Secondly, there has been a shift in buyer dynamics recently. As prices have risen, activity from Eastern States investors has slowed, softening the competition for properties.”

Seven of the regional centres recorded price growth over the quarter. Prices remained stable in Karratha, while Port Hedland was the only regional centre where the median house sale price declined.

Annually, Karratha was the only regional centre to record a decline.

Mr White said there were a couple of factors behind the decline.

“While it takes more time, resources and money to build houses in the Pilbara, the delivery of new housing supply has been more effective in the North West than in the southern regions,” he said.

“This has added some balance to the supply and demand equation and eased some of the upward pressure on prices.

‘In addition, eastern states investors are buying cheaper property, which has seen dwellings settle at a lower point.”

Regional WA rental market

In the rental market, four regional centres recorded an increase in their median weekly rent over the quarter. Two remained unchanged and three saw a decline.

Kalgoorlie-Boulder recorded the most growth, with its median rent increasing 8.3 per cent to $650 per week.

Mr White said while the Kalgoorlie-Boulder market had recorded strong growth this quarter, there were signs of possible change.

“Members feel the market may be reaching an affordability ceiling, as we have seen happen in Perth,” he said.

“While rent prices for new leases have risen, some owners are choosing not to increase rents in existing leases in order to keep good tenants.

“Members are also seeing a lot of enquiry at the lower end of the market, with the ideal price for tenants sitting around $550 per week. In coming quarters, the rate of price growth may slow.”

While interstate investor activity had eased in Perth due to rising house prices impacting yields, they remained active in many of the regions, where median dwelling prices were generally lower.

“For example, in Karratha the median house price is $550,000 and the median weekly rent is $1,000, while in Port Hedland the median house price is $540,000 and the median weekly rent is $973.

“East coast investors, particularly from New South Wales, remain very active in these areas where there is the potential for gross returns of 11 to 12 per cent.

“Within Kalgoorlie, our members say east coast investors are looking for low-maintenance units and houses priced up to $350,000.

“Our Bunbury members, however, report a similar trend to Perth, with eastern states investor activity declining.

Mr White said there were still plenty of good investment opportunities in the regions and recommended potential investors speak to local agents about market conditions.

“The type of properties that are in demand, and by whom, vary from region to region,” he said.

“For example, our members in the Pilbara say mining companies and government are seeking larger properties to house workers.

“In Broome there is government interest in low-maintenance apartments and units to house teams moving to the area.

“While in Bunbury and Kalgoorlie tenants are seeking well-priced properties.”