smh.com.au
Perth Housing Market Sees Record Profitability Surge
Perth's housing market saw a dramatic increase in profitability from 56% to 97% of sales turning a profit between September 2019 and September 2024, resulting in a median profit of $290,000, driven by strong value uplift despite some areas still showing losses, and potentially influenced by factors like increased listing volumes in 2025.
- What is the key factor driving the significant increase in Perth's housing market profitability compared to other capital cities?
- Perth's housing market experienced a significant turnaround in profitability over the past five years, with 97% of home sales in the September 2024 quarter resulting in profit—a substantial increase from 56% in the same period of 2019. This surge in profitability, while not the highest among capital cities (Brisbane and Adelaide held the top two spots), is notable for its dramatic improvement and resulted in a median profit of $290,000 per sale.
- What potential factors could influence Perth's housing market profitability in the near future, and what are the likely implications for home sellers and buyers?
- While Perth's housing market currently enjoys strong profitability, future performance is subject to several factors. Increased listing volumes anticipated in 2025 could moderate buyer activity and potentially reduce the rate of profitable sales. Additionally, the continued affordability pressures in other capital cities like Adelaide and Brisbane may influence Perth's standing in terms of overall profitability.
- How does the distribution of profitable and unprofitable sales vary across different local government areas in Perth, and what are the underlying reasons for these discrepancies?
- The Perth housing market's transformation is linked to various factors, including sustained growth in home values (3% increase in the three months to November 2024) and a decrease in loss-making sales. However, this positive trend isn't uniform across all areas; some local government areas, such as Rockingham, still show a considerable number of loss-making sales (25%).
Cognitive Concepts
Framing Bias
The article frames the story around Perth's remarkable turnaround in profitability, emphasizing the positive aspects and presenting the city as a success story. The headline (not provided, but inferred) and introduction likely set this positive tone, focusing on the high percentage of profitable sales. This framing might lead readers to conclude that Perth's real estate market is booming uniformly, which overlooks the less positive aspects and geographic discrepancies. The positive data is presented prominently, followed by the negative data.
Language Bias
The language used is generally neutral but leans towards positive descriptions of Perth's market. Terms like "remarkable turnaround," "strong value uplift," and "feverish buyer activity" convey a sense of enthusiasm. While not overtly biased, these terms could subtly influence the reader's perception. More neutral alternatives could be 'significant change', 'value increase', and 'high buyer activity'.
Bias by Omission
The article focuses heavily on the positive aspects of Perth's real estate market, showcasing the high percentage of profitable resales and significant median gains. However, it omits discussion of factors that might contribute to these trends, such as government policies, economic conditions beyond the iron ore boom mentioned, or specific market manipulations. While acknowledging pockets of loss-making sales, the article doesn't delve into the reasons behind these losses or the socioeconomic factors affecting different areas. The lack of broader economic context limits a complete understanding of the market dynamics. Further, the article does not discuss the impact of these price changes on renters or the broader affordability crisis that may be occurring simultaneously.
False Dichotomy
The article presents a somewhat simplistic picture by highlighting the high percentage of profitable sales in Perth while mentioning loss-making sales only briefly. It doesn't fully explore the nuances and complexities of the market, such as the varying experiences across different suburbs and property types. The focus on the positive aspects creates an unbalanced view, potentially downplaying the struggles of some sellers.
Sustainable Development Goals
The article highlights a significant turnaround in Perth's housing market, with a substantial increase in profitable home sales. While acknowledging pockets of losses, the overall trend suggests reduced financial disparities among homeowners, particularly in certain areas like Kalamunda, Mosman Park, Nedlands, and South Perth, which experienced high profit margins. This contributes to reduced inequality by improving the financial well-being of a larger segment of the population.