Housing affordability continues to improve in Perth
17th August, 2016
Perth’s first home buyer market recorded healthy activity levels in the June 2016 quarter, with the bulk of sales transactions occurring in the $350,000 to $550,000 price bracket.
REIWA President Hayden Groves said Western Australia was in a unique position with the easing of property prices in recent times having made home ownership more accessible.
“Across the country, particularly in the Sydney and Melbourne metropolitan markets, first home buyers have found it increasingly difficult to secure their first home as prices continue to rise in those capitals.”
“We’re very fortunate in WA that home ownership is still accessible, supported in part by the Barnett Government’s transfer duty exemptions for first home buyers paying up to $430,000.” Mr Groves said.
Houses and units
There was improved affordability across both houses and units in the June quarter.
Perth’s preliminary median house price retreated 1.4 per cent to $522,500 in the three months to June, while the median unit price declined 6.9 per cent to $406,000 from the revised March quarter median of $436,000.
“With the bulk of transactions occurring in Perth’s lower quartile, it’s not surprising that house and unit medians have come in lower over the quarter,” Mr Groves said.
Listings for sale
There was a significant decline in listing volumes in the June quarter, with the number of properties for sale in the metro area dropping 7.3 per cent to 14,159, from 15,269 in the March quarter.
“While home buyers and investors can be choosy in this market, it’s pleasing to see signs of stability with listing numbers declining in the three months to June,” Mr Groves said.
Preliminary sales volumes for the state came in at 5,858 for the three months to June.
Mr Groves said he expected the revised dwelling sales figure for the June quarter to lift to around 8,200 in the coming weeks as more transactions settled.
“For example, the March quarter preliminary dwelling sales data was 5,852, but was then later revised up to 9,061 transactions,” Mr Groves said.
Selling days and discounting
It was two days quicker to sell a property in the June quarter, with the average selling days sitting at 64 days.
Mr Groves said the number of vendors having to discount their asking price had also improved indicating sellers now had a better understanding of the market conditions.
“Homes that are priced correctly for the market from the start are selling quicker. It’s important sellers listen to the advice of their agent and don’t have unrealistic pricing expectations,“ Mr Groves said.
Perth’s rental market presented some challenges for investors in the June quarter, with listings for rent exceeding 11,000 and leasing activity declining five per cent.
“It is apparent those vendors not able to reach their desired selling outcome have now chosen to list their property for rent, a circumstance attributing to the increase in rental stocks this quarter,” Mr Groves said.
This increase has put some downward pressure on rent prices with house and unit median rent prices dropping $10 each over the quarter to $395 and $365 per week respectively.