Perth’s Long Road To A Real Estate Boom

They both boast golden beaches, 28-degree-celsius summer days and glamorous waterfront real estate, but when it comes to comparing property prices there is a great divide between Perth and Sydney.

In addition to the 4000km separating the two Australian cities, there is a cavernous $700,000 gulf in average house prices. But that looks set to change.

Despite Perth being 2020’s second worst-performing Australian capital city in terms of price growth, Louis Christopher, managing director of SQM Research, a residential property data firm, said recent numbers show all the hallmarks of a boom.

“Our forecast is that dwelling prices for Perth will rise by 8% to 12% this year,” he said. “We have another scenario where everything goes right with the vaccine, and everything gets back to some kind of normal in the world, then prices will rise by 10% to 15%.”

“If we are correct about that forecast, it will be the first meaningful rise Perth housing has had since 2007, or briefly between 2013 and 2014,” he added. “It’s taken a long time for the market to experience strong rises. Indeed, the median house price for Perth is actually still lower than it was in 2008, but it’s fair to say it’s offering really good value relative to other cities and relative to its recent history as well,” he said.

According to SQM Research figures, the current median asking price for detached houses in Perth is $672,000, while apartments are $385,000. Meanwhile, Sydney’s median sits at $1.38 million (for houses) and $670,000 (for apartments).

Full Speed Ahead

Data compiled by the Real Estate Institute of Western Australia showed that Perth’s home value index lifted 1.6% in January, and was up 3.8% compared with three months ago, currently making it the fastest-growing major residential market in Australia.

Damian Collins, REIWA president and local broker with Momentum Wealth Residential Property, said the city’s property prices looked set to soar.

“The improvement experienced in the latter half of 2020 has continued into 2021, which is pleasing to see. With the pandemic continuing to impact travel and our local economy bouncing back after a challenging year, more and more West Australians are recognizing that now is the time to buy,” he said.

“Properties continue to sell at a faster rate than they did last year, with the median days to sell sitting at just 21 days, down from 43 days in January 2020. There is little doubt now that the Perth market has swung into the seller’s favour and buyers are needing to act a lot faster to secure a property,” he said.

Confidence Has Returned

Perth’s luxury real estate market is also currently experiencing a renaissance, according to realtor Mark Anderson of Hub Residential, a brokerage based in the West Australian capital city.

“We had a drop in confidence around May and June of 2020 at the height of Covid uncertainty in Australia, but that’s changed,” he said.

“In the $5 million to $30 million price brackets, I’d have to say that buyers at that level have a pretty good handle on where the economy is going. They’re looking at it from the point of view that this is a good time to trade, a good time to buy,” he added, attributing the positive sentiment to Australia’s record-low mortgage interest rates (the official cash rate is sitting at 0.10%) and Western Australia’s comparatively low coronavirus infection rate. (The state has recorded 907 cases and nine deaths since the state’s first reported case on Feb. 21, 2020.)

Mr Anderson said waterfront suburbs would be the ones to watch as home buyers and investors, including a wave of international ex-pats, seek out lifestyle properties in the wake of the pandemic.

“Towards the end of last year, for example, Cottesloe turbocharged itself in about 10 weeks and in some cases, the increases were anywhere between 15% and 25% year on year,” Mr Anderson said of the beachfront suburb where the median house price is now $1.95 million.

Located approximately seven miles from the city centre, Cottesloe is known for its more than half a mile stretch of white sand and waterfront restaurants.

“Some of these buyers see Cottesloe as a blue-chip investment, but ultimately I think people are asking themselves ‘Where do I want to end up?’ and the answer is the beach. I guess it’s a great example of FOMO,” he added.

Comparing the Markets

“Perth is just one of those really unique places in the world. I ask people when they’re buying a house here, ‘Why did you come?’ and they often say, ‘We love how it’s so spacious, it’s like a big country town!’” Mr Anderson said.

Perth’s population according to the 2016 Census was just under 2 million, while Sydney’s was approaching 5 million.

He said when international, and interstate, buyers stack Perth up against its more famous cousin, they often see more bang for their buck in Sydney.

“Our prices are really inexpensive given the fact that we’re so close to the beach, or the river. Our beaches are as good as Sydney, but the cost of living isn’t as high—and it’s relatively safe. We don’t even have as much rain, or the damaging storms that Sydney has,” Mr Anderson said.

On paper, the comparison also works in Perth’s favour. For Sydney’s median house price of $1.38 million, buyers in blue chip waterfront suburbs would get a modest attached two-bedroom home. In Perth, the same money could secure a spacious four- to five-bedroom family property on a grand block close to the beach or riverfront.

Often referred to as the most isolated city in the world, Perth is more than 2000km from the nearest city. Its property market is also unique in that global commodity prices play their part due to the significant role mining has in the state of Western Australia.

“What makes us think this time around we’re definitely going to see a pick up in Perth is what’s happening in the local rental market. Rents there absolutely plummeted in 2019 and 2020, but right now the vacancy rate at the end of December was just 0.9%. At its worst, when Perth rentals were majorly oversupplied back in 2016 and 2017, the rate was 5.5%,” Mr Christopher said.

As a result, rents are surging. SQM Research analysis shows house rents in Perth rose 12.7% in a year to $499 a week while apartments increased by 10.4% to $375 a week.

Mr Collins added that Perth’s residential vacancy rate has hit the lowest level recorded by the REIWA in 40 years.

“With the rental stock levels remaining low and expected to do so in the coming months, combined with low interest rates and expected gross yield growth, we will expect investor numbers to increase in the latter end of the year, particularly when the moratorium ends in March,” he explained, referring to the conclusion of a state-wide freeze prohibiting residential rental increases.

A City on the Rebound

Mr Christopher said that the Perth rental market has generally been the lead indicator for the residential sale market.

“You don’t always get that with other cities. In Sydney and Melbourne, you can have a weak rental market, but the [sales] market can still stay strong, and vice versa,” he said.

Mr Christopher explained that by 2019 there was no new construction in Perth, however employment levels began to increase due to a pick-up in local mining projects. Although projects paused briefly in 2020 due to Covid, it is now all systems go.

“Perth has been creating jobs, and still is creating jobs, but there’s been no new accommodation for the additional people coming to Perth,” he said.

Conversely, Australia’s other capitals have experienced a rise in vacancies and plummeting asking rents due to stalled immigration and international student numbers since the onset of the pandemic.

This, according to Mr Christopher, makes Perth more or less “coronavirus-proof” in the future.

“Perth traditionally doesn’t get a large share of international migration. Everyone tends to go to Sydney and Melbourne, so when Australia’s borders closed, Perth wasn’t hit as hard as the larger cities were,” he said.

PARIS —Paris has long been a byword for luxurious living. The traditional components of the upscale home, from parquet floors to elaborate moldings, have their origins here. Yet settling down in just the right address in this low-rise, high-density city may be the greatest luxury of all.

Tradition reigns supreme in Paris real estate, where certain conditions seem set in stone—the western half of the city, on either side of the Seine, has long been more expensive than the east. But in the fashion world’s capital, parts of the housing market are also subject to shifting fads. In the trendy, hilly northeast, a roving cool factor can send prices in this year’s hip neighborhood rising, while last year’s might seem like a sudden bargain.

This week, with the opening of the Olympic Games and the eyes of the world turned toward Paris, The Wall Street Journal looks at the most expensive and desirable areas in the City of Light.

The Most Expensive Arrondissement: the 6th

Known for historic architecture, elegant apartment houses and bohemian street cred, the 6th Arrondissement is Paris’s answer to Manhattan’s West Village. Like its New York counterpart, the 6th’s starving-artist days are long behind it. But the charm that first wooed notable residents like Gertrude Stein and Jean-Paul Sartre is still largely intact, attracting high-minded tourists and deep-pocketed homeowners who can afford its once-edgy, now serene atmosphere.

Le Breton George V Notaires, a Paris notary with an international clientele, says the 6th consistently holds the title of most expensive arrondissement among Paris’s 20 administrative districts, and 2023 was no exception. Last year, average home prices reached $1,428 a square foot—almost 30% higher than the Paris average of $1,100 a square foot.

According to Meilleurs Agents, the Paris real estate appraisal company, the 6th is also home to three of the city’s five most expensive streets. Rue de Furstemberg, a secluded loop between Boulevard Saint-Germain and the Seine, comes in on top, with average prices of $2,454 a square foot as of March 2024.

For more than two decades, Kyle Branum, a 51-year-old attorney, and Kimberly Branum, a 60-year-old retired CEO, have been regular visitors to Paris, opting for apartment rentals and ultimately an ownership interest in an apartment in the city’s 7th Arrondissement, a sedate Left Bank district known for its discreet atmosphere and plutocratic residents.

“The 7th was the only place we stayed,” says Kimberly, “but we spent most of our time in the 6th.”

In 2022, inspired by the strength of the dollar, the Branums decided to fulfil a longstanding dream of buying in Paris. Working with Paris Property Group, they opted for a 1,465-square-foot, three-bedroom in a building dating to the 17th century on a side street in the 6th Arrondissement. They paid $2.7 million for the unit and then spent just over $1 million on the renovation, working with Franco-American visual artist Monte Laster, who also does interiors.

The couple, who live in Santa Barbara, Calif., plan to spend about three months a year in Paris, hosting children and grandchildren, and cooking after forays to local food markets. Their new kitchen, which includes a French stove from luxury appliance brand Lacanche, is Kimberly’s favourite room, she says.

Another American, investor Ashley Maddox, 49, is also considering relocating.

In 2012, the longtime Paris resident bought a dingy, overstuffed 1,765-square-foot apartment in the 6th and started from scratch. She paid $2.5 million and undertook a gut renovation and building improvements for about $800,000. A centrepiece of the home now is the one-time salon, which was turned into an open-plan kitchen and dining area where Maddox and her three children tend to hang out, American-style. Just outside her door are some of the city’s best-known bakeries and cheesemongers, and she is a short walk from the Jardin du Luxembourg, the Left Bank’s premier green space.

“A lot of the majesty of the city is accessible from here,” she says. “It’s so central, it’s bananas.” Now that two of her children are going away to school, she has listed the four-bedroom apartment with Varenne for $5 million.

The Most Expensive Neighbourhoods: Notre-Dame and Invalides

Garrow Kedigian is moving up in the world of Parisian real estate by heading south of the Seine.

During the pandemic, the Canada-born, New York-based interior designer reassessed his life, he says, and decided “I’m not going to wait any longer to have a pied-à-terre in Paris.”

He originally selected a 1,130-square-foot one-bedroom in the trendy 9th Arrondissement, an up-and-coming Right Bank district just below Montmartre. But he soon realised it was too small for his extended stays, not to mention hosting guests from out of town.

After paying about $1.6 million in 2022 and then investing about $55,000 in new decor, he put the unit up for sale in early 2024 and went house-shopping a second time. He ended up in the Invalides quarter of the 7th Arrondissement in the shadow of one Paris’s signature monuments, the golden-domed Hôtel des Invalides, which dates to the 17th century and is fronted by a grand esplanade.

His new neighbourhood vies for Paris’s most expensive with the Notre-Dame quarter in the 4th Arrondissement, centred on a few islands in the Seine behind its namesake cathedral. According to Le Breton, home prices in the Notre-Dame neighbourhood were $1,818 a square foot in 2023, followed by $1,568 a square foot in Invalides.

After breaking even on his Right Bank one-bedroom, Kedigian paid $2.4 million for his new 1,450-square-foot two-bedroom in a late 19th-century building. It has southern exposures, rounded living-room windows and “gorgeous floors,” he says. Kedigian, who bought the new flat through Junot Fine Properties/Knight Frank, plans to spend up to $435,000 on a renovation that will involve restoring the original 12-foot ceiling height in many of the rooms, as well as rescuing the ceilings’ elaborate stucco detailing. He expects to finish in 2025.

Over in the Notre-Dame neighbourhood, Belles demeures de France/Christie’s recently sold a 2,370-square-foot, four-bedroom home for close to the asking price of about $8.6 million, or about $3,630 a square foot. Listing agent Marie-Hélène Lundgreen says this places the unit near the very top of Paris luxury real estate, where prime homes typically sell between $2,530 and $4,040 a square foot.

The Most Expensive Suburb: Neuilly-sur-Seine

The Boulevard Périphérique, the 22-mile ring road that surrounds Paris and its 20 arrondissements, was once a line in the sand for Parisians, who regarded the French capital’s numerous suburbs as something to drive through on their way to and from vacation. The past few decades have seen waves of gentrification beyond the city’s borders, upgrading humble or industrial districts to the north and east into prime residential areas. And it has turned Neuilly-sur-Seine, just northwest of the city, into a luxury compound of first resort.

In 2023, Neuilly’s average home price of $1,092 a square foot made the leafy, stately community Paris’s most expensive suburb.

Longtime residents, Alain and Michèle Bigio, decided this year is the right time to list their 7,730-square-foot, four-bedroom townhouse on a gated Neuilly street.

The couple, now in their mid 70s, completed the home in 1990, two years after they purchased a small parcel of garden from the owners next door for an undisclosed amount. Having relocated from a white-marble château outside Paris, the couple echoed their previous home by using white- and cream-coloured stone in the new four-story build. The Bigios, who will relocate just back over the border in the 16th Arrondissement, have listed the property with Emile Garcin Propriétés for $14.7 million.

The couple raised two adult children here and undertook upgrades in their empty-nester years—most recently, an indoor pool in the basement and a new elevator.

The cool, pale interiors give way to dark and sardonic images in the former staff’s quarters in the basement where Alain works on his hobby—surreal and satirical paintings, whose risqué content means that his wife prefers they stay downstairs. “I’m not a painter,” he says. “But I paint.”

The Trendiest Arrondissement: the 9th

French interior designer Julie Hamon is theatre royalty. Her grandfather was playwright Jean Anouilh, a giant of 20th-century French literature, and her sister is actress Gwendoline Hamon. The 52-year-old, who divides her time between Paris and the U.K., still remembers when the city’s 9th Arrondissement, where she and her husband bought their 1,885-square-foot duplex in 2017, was a place to have fun rather than put down roots. Now, the 9th is the place to do both.

The 9th, a largely 19th-century district, is Paris at its most urban. But what it lacks in parks and other green spaces, it makes up with nightlife and a bustling street life. Among Paris’s gentrifying districts, which have been transformed since 2000 from near-slums to the brink of luxury, the 9th has emerged as the clear winner. According to Le Breton, average 2023 home prices here were $1,062 a square foot, while its nearest competitors for the cool crown, the 10th and the 11th, have yet to break $1,011 a square foot.

A co-principal in the Bobo Design Studio, Hamon—whose gut renovation includes a dramatic skylight, a home cinema and air conditioning—still seems surprised at how far her arrondissement has come. “The 9th used to be well known for all the theatres, nightclubs and strip clubs,” she says. “But it was never a place where you wanted to live—now it’s the place to be.”

With their youngest child about to go to college, she and her husband, 52-year-old entrepreneur Guillaume Clignet, decided to list their Paris home for $3.45 million and live in London full-time. Propriétés Parisiennes/Sotheby’s is handling the listing, which has just gone into contract after about six months on the market.

The 9th’s music venues were a draw for 44-year-old American musician and piano dealer, Ronen Segev, who divides his time between Miami and a 1,725-square-foot, two-bedroom in the lower reaches of the arrondissement. Aided by Paris Property Group, Segev purchased the apartment at auction during the pandemic, sight unseen, for $1.69 million. He spent $270,000 on a renovation, knocking down a wall to make a larger salon suitable for home concerts.

During the Olympics, Segev is renting out the space for about $22,850 a week to attendees of the Games. Otherwise, he prefers longer-term sublets to visiting musicians for $32,700 a month.

Most Exclusive Address: Avenue Junot

Hidden in the hilly expanses of the 18th Arrondissement lies a legendary street that, for those in the know, is the city’s most exclusive address. Avenue Junot, a bucolic tree-lined lane, is a fairy-tale version of the city, separate from the gritty bustle that surrounds it.

Homes here rarely come up for sale, and, when they do, they tend to be off-market, or sold before they can be listed. Martine Kuperfis—whose Paris-based Junot Group real-estate company is named for the street—says the most expensive units here are penthouses with views over the whole of the city.

In 2021, her agency sold a 3,230-square-foot triplex apartment, with a 1,400-square-foot terrace, for $8.5 million. At about $2,630 a square foot, that is three times the current average price in the whole of the 18th.

Among its current Junot listings is a 1930s 1,220-square-foot townhouse on the avenue’s cobblestone extension, with an asking price of $2.8 million.