Source: The Real Estate Conversation
Property prices in Perth have strengthened during the June 2018 quarter, according to fresh research from the Real Estate Institute of Western Australia (REIWA).
Simon McGrath, principal of Abel McGrath in Perth told WILLIAMS MEDIA now is the time to “be strategic and make a commitment to securing a property in that location you’ve always wanted”, as data from the Real Estate Institute of Western Australia reveals property prices in Perth are strengthening.
REIWA President, Hayden Groves told WILLIAMS MEDIA the data indicates Perth’s median house price would settle at around $520,000 for the June 2018 quarter, which was up one per cent compared to the March 2018 quarter and two per cent compared to the June 2017 quarter.
“In addition, Perth’s median unit price is expected to lift by 4.9 per cent to $419,500 for the June 2018 quarter, which is 2.3 per cent higher than the same time last year,” Mr Groves said.
“After declining during the March quarter, it is pleasing to see prices rebound strongly this quarter. With the worst of the market downturn appearing over, the improvement in house and unit prices this quarter suggests buyer confidence is returning which should bode well for sellers as we move into spring,” Mr Groves said.
Mr McGrath’s advice to those looking to enter the market is to act now.
“At times like these, properties become available that would generally not be available. That is the big gift in this market,” McGrath said.
Overall, Mr McGrath says the market is “okay, but not great”.
“Perth is nothing but a big mining town. The flow-on effect from the mining industry affects Perth’s real estate market, so you’ve got a real upswing. Behind the scenes there is plenty of optimism.
“There is still plenty of caution in the market, prices aren’t shooting up. It is a very stoic market.
“We are seeing reasonable numbers at home opens, but it can be very spasmodic. Some home openings will be fantastic, others very quiet – there is no rhyme or reason to it,” Mr McGrath continued.
With 6,900 sales recorded during the June 2018 quarter, sales volumes declined during the June quarter. Mr Groves said the onset of winter likely contributed to subdued activity levels.
“It’s not uncommon for activity to drop off this time of year. Traditionally, activity tends to slow during the winter months before picking up again in spring,” Mr Groves said.
Despite the overall decline in sales, numerous suburbs recorded more sales this quarter than they did in the last quarter.
“The suburbs with the biggest improvement in house sales were North Perth, Queens Park, Singleton, Camillo and Beldon, while West Perth, Balcatta, Rockingham, Claremont and Mount Lawley had the biggest improvement in unit sales,” Mr Groves said.
“Good quality family homes attracting a lot of attention”
REIWA data shows the composition of sales shifted during the June quarter, with more house sales recorded in the $800,000 and above price range than in the last quarter.
“The June 2018 quarter continued the trends observed during the December 2017 quarter, with good quality family homes attracting a lot of attention in aspirational areas,” Groves told WILLIAMS MEDIA.
“As the Western Australian economy begins to regain strength and owner-occupier loans remain the most affordable they have been in decades, buyers are recognising there is good opportunity to secure a family home in areas that might previously have been considered out of reach,” Mr Groves said.
Listing stock has “hit the ceiling”
Mr Groves told WILLIAMS MEDIA stock levels across the metro area have declined 1.1 per cent during the June 2018 quarter.
“We certainly appear to have hit the ceiling as far as listing stock is concerned. Despite fewer sales being recorded this quarter, it is encouraging to see stock levels have continued to be absorbed,” Mr Groves said.
On average, it took 67 days to sell a house in Perth during the quarter, one day faster than both the March 2018 and June 2017 quarters.
Mr McGrath told WILLIAMS MEDIA that although the market is pretty tough, his area in the western suburbs of Perth have short supply.
“There’s no denying – it is pretty tough. The good news in the western suburbs is that we have got short supply, whereas in the greater Perth market there is oversupply in many places. The short supply in the western suburbs is ticking the value of buoyance.” Mr McGrath said.
Less vendors discounting their asking price
Data for the June 2018 quarter shows the proportion of vendors who had to discount their asking price in order to achieve a sale declined by five per cent.
“With reductions observed in average selling days and discounting, this is a good indicator sellers are listening to the advice of their agents and pricing their property in line with market expectations,” Mr Groves said.