New listings in Melbourne hit their highest level on record for July according to new Domain data released Monday, while the median days on market for Melbourne is 39 days to Perth’s 10.
Chris Christofi, chief executive of Melbourne-based property investment firm Reventon, said the City of Melton in the north-west offered affordable real estate with rapid population growth and a $1 billion hospital project and $2 billion business park under way.
“While many are steering away from Victoria, we see an opportunity,” he said. “Melbourne’s strong employment opportunities and high population growth indicate a shift back to this market is imminent.”
While strong population growth and very low vacancy rates are drivers, the biggest reason for the lack of new supply in Perth is the cost of construction, says Ray White Group chief economist Nerida Conisbee.
She said the cost of building had re-accelerated in WA to pandemic levels, rising by 18.9 per cent in the 12 months to June and now far exceeding the cost of established homes.
Labour shortages continue to be a major factor and year-on-year wage increases in wages remain problematic to bringing down costs.
The ABS statistics specifically pointed to a lack of finishing trades. Strong union activity, now the subject of a Senate inquiry, has also contributed to low productivity in the industry.
“We are already seeing clearly how much higher construction costs are, leading to fewer homes being built and higher prices for existing properties,” Conisbee said.
“Perth is seeing the strongest house price growth in Australia with prices up [more than] 25 per cent over the past 12 months.”
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