This article is contributed by Lily Chong, Country Head of IQI Australia
Western Australia has officially claimed the top spot in economic performance nationwide, according to the latest CommSec State of the States report. This marks WA’s first top ranking since 2014, bolstered by strong indicators in retail spending, low unemployment, and record-setting population growth, which helped WA surpass all other states.
WA Premier Roger Cook highlighted that the state’s economic strength is a key driver of national prosperity. Currently, WA is experiencing a 3.11% annual population growth, which has contributed to a 10.5% increase in retail spending in the June quarter of 2024. The population milestone of reaching 3 million people has also spurred a rise in car sales, which are up 25% compared to the decade average. However, this growth spurt has come with its challenges: inflation in Perth is the highest in the nation at 4.6%, and the building sector remains under-resourced, putting pressure on new housing developments.
Despite these challenges, WA’s economic outlook remains promising. Future performance is expected to stay strong, though rising costs and market demands may influence the state’s ability to maintain this momentum.
Property Market Set for Record Growth
Perth’s property market is equally impressive, with forecasts from the Real Estate Institute of WA (REIWA) predicting a 25% growth in house prices and a 20% rise in unit prices by the end of 2024. This could push the median house price to $750,000 and units to above $500,000 by year-end. As of September, the median house price had reached $707,000—a 17.8% increase since December 2023—and median unit prices had hit a record $470,000.
REIWA CEO Cath Hart attributes this surge to continued population growth and limited housing stock. Although home build times have improved, housing completions remain low, keeping demand strong and exerting upward pressure on prices. While factors like interest rates and upcoming elections could moderate growth, conditions remain favorable for the market’s continued upward trend.
Perth Rental Market Eases Amid Higher Prices
Perth’s rental market shows signs of moderation, with median rent prices for houses and dwellings remaining stable at $650 per week, while unit rents have risen to $640. Vacancy rates, which increased from a low of 0.4% in March to 1.6% in September, indicate a gradual easing of rental pressures. According to Hart, further rental increases are likely to be modest as the market approaches an affordability ceiling and additional supply enters the market.
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Data extracted in December 2024
