REIWA claims Perth property market comeback

as posted here

DESPITE slumping house prices across the country, the Real Estate Institute of WA claims the Perth market has made a strong comeback in the March quarter.

According to REIWA, Perth’s median house price jumped by $10,000 since December last year, lifting the current median price to $430,000, with sales volumes returning to a 15 year average.

REIWA President Rob Druitt said WA’s property market experienced its strongest turnover since September 2007 with the number of sales increasing by more than 40 per cent since December.

“While the Federal Government’s first homebuyer boost has been a major reason behind this renewed activity, there is also evidence that trade-up buyers are returning to the market,” Mr Druitt said.

Perth also recorded an increase in unit prices, lifting by just under two per cent to a median of $348,500.

Blocks of residential land also saw growth in the March quarter, increasing by 4.5 per cent, or $10,000, to a median of $230,000, largely driven by first home builders.

Mr Druitt said there was a turnaround in house sales during the quarter, with evidence suggesting the number of sales for the month of March were 85 per cent above December last year.

“This increase in sales was experienced across all market sectors, particularly the coastal region from Scarborough to Butler and in the South East corridor in the Canning and Gosnells local government areas.

“Much of the increase in the overall median was driven by price growth in the middle ring and coastal markets such as Wanneroo North West (5 per cent), Wanneroo South (7.6 per cent), Stirling West (4 per cent), Bayswater-Bassendean (1.9 per cent), Gosnells (3.6 per cent), and Cockburn (3.3 per cent).”

“In contrast, some inner markets saw a fall in prices, including the Western Suburbs (-12.5 per cent) and Vincent (-3.1 per cent), while Armadale-Serpentine on Perth’s outer fringe also fell by 2.1 per cent,” Mr Druitt said.

The number of homes for sale in Perth had been progressively falling from the over-supply of March 2008. The figure had dropped from 17,500 dwellings in March last year to 14,300 at the end of April this year.

“This slide in the number of listings suggests that the excess stock built by speculators during the boom is likely to evaporate by the middle of this year, and probably triggering fresh construction,” Mr Druitt said.

Perth’s rental vacancy rate had eased to 2.9 percent, a figure that was historically normal for the city.

This had reduced the pressure on rents which had remained stable for the last six months, resting at a median price of $360 per week spread across both units and houses.

Mr Druitt said it was a similar positive story in regional WA, where house prices had also jumped by $10,000, or 2.9 per cent, in the quarter.

“A typical house in regional WA will now cost you $350,000, while units in the regions have jumped by almost 7 per
cent, or $20,000, to a new median of $310,000.

“However, unlike the city, land prices have remained quite stable, lifting by around $2,000 to a median block price of
$155,000,” Mr Druitt said.

According to REIWA there were about 15,000 properties on the market during the March quarter, down from around
16,000 in December.

“The number of selling days is steady at 76, meaning it’s taking about two and half months to sell a property in the
current climate. This is 5 days more than the same time last year.

“However, it is a patchy market and some areas such as Armadale, Gosnells and Wanneroo South have seen selling days come down quite a bit,” Mr Druitt said.

Mr Druitt said it was very hard to predict how the June quarter might fare, as the winter months were traditionally very quiet for the sector.

“The Rudd Government’s extension of the first homebuyer boost through to 30 September will have an impact, as will rates of unemployment and general overall consumer sentiment.

“Although it must be said that currently the market is looking pretty robust with keen buyers finding lots of opportunities to keep them motivated,” Mr Druitt said.

as posted here