The WA region where house prices are growing faster than Perth
As property values soar across the country, it has become clear that even regional towns are not immune from the rise in house prices.
Karratha has topped the national leadership rankings, recording the country’s highest annual growth in house prices.
The WA mining hub has seen a 26.4 per cent increase in property prices over the last 12 months, narrowly beating Perth at 26 per cent and Kalgoorlie-Boulder at 23.1 per cent.
Property experts in the Pilbara claim rising costs are a result of a lack of housing supply and investors re-entering the market.
Realmark principal and sales director Jordan James said he first noticed a shift in the market in November and continued until its peak in March.
“We’ve probably noticed the biggest change since November of last year when we started to see investors re-entering our real estate market. It’s been a long time since they’ve actually entered,” he said.
“Before this, I would say probably 90 percent of our homes were sold to homeowners. But since then, I’ve seen that shift move more toward a 50/50 split depending on price point.”
“In the last three weeks there have probably been more than 35 listings come on the market in Karratha after Anzac Day, which is the largest number of listings to come on the market in such a small window in the eight years I’ve been selling property.”
James said it was the high demand for established properties that ultimately caused house prices to rise.
“I think the re-entry of investors into the market has played a role, but ultimately the reality is that the rental market is very strong, rental prices are very high and a lot of people are saying, ‘You know what, we’d better buy a property because it’s too expensive,’” he said.
“If you’re paying $1,500 a week in rent, it’s cheaper to go out and buy a property. That adds to a huge demand problem.”
The current average value of a property in Karratha is $765,275. By comparison, the average price of a home in Perth is $1,038,344 and $802,805 in Albany.
Pilbara Real Estate investment property specialist Isabelle Stratford said she had noticed a change in investors coming back to the property market, but also noticed more people were choosing to move to Karratha for a career change.
“I would say it’s a mix of both; the majority of people who live here work in mining and mining, and then they work in other industries that support mining,” he said.
“I would also say that we are seeing a lot of people between the ages of 20 and 35 moving here for career advancement and also the ability to build their own wealth.”
Stratford said a lack of supply and demand for housing, as well as high construction costs, also contributed to the increase in house prices.
“In the Pilbara, our construction costs and transport costs are high, so our wait times are longer when it comes to construction, and so that pushes up existing house prices because we see the demand is very high in terms of the supply that we have,” he said.
As for why more people are choosing to live in regional WA, Stratford believes it may have to do with the cost of living crisis.
“You also get a lot of subsidies for living in a regional area, in some cases housing and other things. So I think that’s an important factor for families as well,” he said.
“They may be seeing that wages are higher in the area and it’s cheaper to get into the property market, so that can definitely be an important indicator.”
The ability to work a FIFO job without having to be away from family is another incentive, according to James.
“Obviously there’s a lot of work in the Pilbara too. I don’t think there are many people who like to FIFO anymore. So they go, well, let’s move somewhere else and be a family together,” he said.
“I see this a lot. Growing up with a FIFO dad, we did the same thing.”
But Karratha isn’t the only one experiencing an increase in property prices in Western Australia.
Latest data from Cotality shows that among the country’s top 50 regionally important urban areas, Busselton recorded the strongest quarterly growth at the start of the year, with an increase of 7.5 per cent, followed by Albany at 7.2 per cent, Geraldton at 6.8 per cent and Bunbury at 5.8 per cent.
WA also led annual growth; House values in Kalgoorlie-Boulder increased by 23.1 per cent, followed by Bunbury at 22.3 per cent and Busselton at 22.0 per cent.
Gerard Burg, Cotality’s head of Australian research, said the strength in WA’s south-west was “particularly notable”.
“Busselton’s growth is occurring despite having a higher average value than Greater Perth, suggesting this performance is driven by more than just affordability,” he said.
“We are seeing significant spread of demand from the Perth market to nearby regional centres.”
