Professionals Real Estate Sales turnover strong but prices steady – March quarter results show a return to normal
The Real Estate Institute of Western Australia says that sales activity in Perth’s housing market has returned to its 15 year average after three years of volatility.
Its data for the March quarter, released today, found that turnover lifted by 14 per cent across the state during the quarter as consumer confidence returned to property.
REIWA President David Airey said the surge in sales saw Perth’s median house price rise by at least $5,000 and he believed it would likely lift by up to $10,000 with late settlements.
“It seems we have a new record for Perth’s median house price of $510,000, but it’s important to note that this is due largely to the composition of sales in which a greater volume of more expensive homes were being purchased,” Mr Airey said.
Around the state some 13,200 properties changed hands, up from 11,600 in December and up by 12 per cent on the same time last year.
Units, apartments and villas performed better than houses during the quarter, lifting by around $10,000 to a median of $425,000. Mr Airey said that this had been pushed along by strong first home buyer activity.
“The number of selling days has hardly moved and now sits at an average of 57, but the good news is that old stock which has been lingering on the market for a while is finally starting to shift. “However, the number of listings slumped to a relative low of 8,260 properties, given that around 12,000 is considered normal for Perth,” he said.
During the quarter half of all sellers were prepared to drop their asking price and of those who did the average gap between the asking and selling price was a drop of 5.6 per cent. “This ‘seller sentiment’ has hardly budged over the last nine months but is to be expected given that the market has swung back to favour them.
“We see this through the emergence of price-bidding and multiple offers and with some vendors exceeding their asking price,” Mr Airey said.
The metropolitan rental market proved to be quite unusual during the quarter in that the vacancy rate rose but so too did median rents.
“Normally the vacancy rate tightens during the March quarter which is a seasonal occurrence. It’s odd therefore that the number of available properties actually increased from around 2,400 properties in December to 3,200 in March and during the same period rents went up 4.4 per cent,” Mr Airey said. Perth’s median rent is now at $470 per week which typically breaks down to $480 for a house and $450 for a unit or villa.
Mr Airey said he felt that the large number of tenants ending their lease to buy their first home was contributing to the relaxing vacancy rate and that he would not be surprised if rents came down in the June quarter.
Across regional centers REIWA found there was virtually no price movement during the quarter or over the previous year, however there were pockets of exception.
Of greater note was the lift in turner experienced in several country areas. Mandurah-Murray saw a healthy 40 per cent lift in sales while Bunbury was more modest with turnover up by 8 per cent. Busselton, Dunsborough, Augusta and Margaret River all had a kick-up in turnover but based on sales of fewer than 100 properties in each region.
Albany saw a 7 per cent boost in sales while neighbouring Esperance looks to have had a whopping 50 per cent boost in turnover on early figures. In Kalgoorlie-Boulder there was a healthy 13 per cent increase in sales, while in Geraldton and Greenough turnover was very flat with 120 homes sold in the December quarter and the same number sold in the March quarter.
In Broome there was little movement in turnover, while Port Hedland and Karratha showed no discernible lift from their lowest ever sales in the December quarter not experienced since the 1990s.
“This shows how quickly markets can turn; just 12 months ago many commentators were lauding the performance of these two Pilbara centres,” Mr Airey said.
Mr Airey said that overall it had been a good quarter for buyers and sellers with most indicators continuing to point to a long term stabilisation.
“REIWA agents are certainly reporting strong crowds at home-opens and multiple offers on well priced properties.
“First home buyer activity, however, appears to have peaked and has fallen to an estimated 26 per cent of established dwelling sales. It looks like their enthusiastic rush into the market over the last year is now declining.
“Even so, the healthy activity from new entrants to the market has been a terrific boost to trade-up buyers and generated a lot of sales activity among homes valued in the range of $600,000 to $800,000.
“The winter months are traditionally more quiet in the market, so it will be interesting to see how sales and prices progress through to June. I suspect it will be steady and confident but with a softening around rents in some areas,” Mr Airey said.
