House price rises exceed forecasts

as posted here

The Perth property market exceeded expectations in the past three months with prices rising 3.5 per cent as buyers trading up moved on more expensive homes, the Real Estate Institute of WA said yesterday.

The median price for the last quarter of the financial year rose $15,000 to $445,000.

The market recovered the losses of the past year and returned to a similar position as at June 30 last year when the median price was $448,000.

Prices in the western suburbs soared 12 per cent, which virtually erased a 12.5 per cent fall in the March quarter. The median price grew $155,000 to $1.205 million.

The institute’s figures for the June quarter show the Perth median house price was only $25,000 lower than the peak of $470,000 in December 2007.

A key catalyst in the second consecutive quarter of price rises was the return of buyers trading up.

REIWA president Rob Druitt said the figures should be treated cautiously. Perth would not be headed back to a boom period any time soon despite encouraging growth. He said the first-homebuyers’ domination of the market was lessening.

“It’s a result of more higher-priced sales. We’re starting to see more trade-up buyers in the $500,000 to $1 million market,” Mr Druitt said. “I think we should be mindful we’ve had a boom, we’ve had a bust and it does take a while for markets to recover. Modest rises and a stable market is a better environment anyway.”

Sales rose a further 8 per cent in the June quarter on top of a 38 per cent rise in the March quarter. Listings had reduced to 12,800 properties, including 2100 blocks of land, compared with more than 18,000 at the peak of the market in 2007.

It took seven fewer days on average to sell a home in Perth during the June quarter, with the norm being 70 days.

Weekly rents for houses fell by $10 a week to $360 and unit rents were stable at $350 a week. The Perth rental vacancy rate was now higher than usual, having risen by 0.7 per cent to 3.6 per cent in the June quarter.

The western suburbs had the biggest quarterly rise of any Perth region, though Joondalup North, Melville and Armadale-Serpentine posted increases of 4 to 6 per cent. Firsthomebuyer hotspots of Gosnells, Cockburn, Rockingham, Kwinana and parts of Wanneroo recorded slight falls or zero growth.

A special Westpac survey showed confidence about housing prices was returning to boom-like levels — almost one in 10 West Australians expected prices to grow more than 10 per cent over the coming year and a further 38 per cent believed prices would climb by up to 10 per cent.
KATE CAMPBELL, SANDI LOVATT and SHANE WRIGHT


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