Big rise in Perth house prices

Growing confidence in the WA economy has helped underpin a surge in Perth house prices, which are tipped to return to record highs within months.

Perth’s median house price rose 2.5 per cent in the December quarter and 6.1 per cent for the year, according to an Australian Property Monitors report out today.

The growth outstripped every other capital except Darwin and was well above the national increase of 1.9 per cent for the quarter and 2.1 per cent for the year.

APM senior economist Andrew Wilson said Perth house prices were less than 2 per cent below their 2010 all-time highs and on track to return to record levels, potentially in the March quarter.

“They’re big numbers. Certainly Perth is on the march,” Mr Wilson said.

Factors driving the surge included optimism about the economy, interest rate cuts and a tight rental market that sent prices skyward.

“Perth has been characterised prior to last year as being uncharacteristically subdued and that reflected a low confidence level in the housing market,” he said.

“But pressures that are irresistible have been building and that’s an improvement in affordability, lower interest rates, growth in wages, low unemployment and, of course, increased population.

“There were a lot of issues in WA in 2011 to do with the debate on the mining tax and the debate on the carbon tax and these things certainly did play into consumer sentiment and were some of the things that kept the market down in 2011.

“But I think that’s now been put to bed and the economy is certainly surging ahead.

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