Perth property market shows signs of recovery

The worst appears to be over for the Perth property market, with September quarter data revealing steady or improved conditions across key indicators for a second straight quarter. Pleasingly, we’ve observed a sustained period of consistent stock levels, sales activity and house prices in the June and September quarters. This is a strong indicator the Perth market may have finally found its floor and is on the cusp of improving.
Median House and Unit Price
Perth’s median house price for the September quarter came in at $499,000. This figure is expected to lift to around $515,000 once all sales have settled, up from $510,000 in the June quarter. REIWA analysis shows Perth’s median house price experienced a marginal one per cent decline when compared to the September quarter 2016. Comparatively, if we look at the September quarters 2015 and 2016, Perth’s quarterly median declined 2.3 per cent, meaning the rate of decline is slower now than it was two years ago. Longer term trends like this provide further evidence the Perth market is headed in a more positive direction. Perth’s preliminary median unit price is $395,000 for the three months to September. reiwa.com data projects this figure will lift to $407,000 once all sales have settled, putting it on par with the June quarter median. It bodes well for the market that Perth’s house and unit prices are exhibiting signs of recovery simultaneously.
Apartment Market
Apartment sales in Perth accounted for approximately 20 per cent of multi-residential transactions in the September quarter. While Perth remains the most popular suburb for apartment sales, we have seen an increase in suburbs outside the CBD. Five years ago, 65 per cent of all apartment sales occurred in Perth, but that figure has since reduced to 25 per cent, while other areas have started to trend up. Across the Perth metro region, the Western Suburbs has seen the strongest growth in apartment sales. The sub-market now represents 7.2 per cent of total Perth metro apartment sales, up from 4.8 per cent in 2012. Other strong performers are the South Perth/ Victoria Park, Rockingham/Kwinana and Cockburn sub-markets. The appeal for apartments is no longer confined to city based living and more and more West Australians are seeing the convenience and lifestyle opportunities apartments offer in suburbs traditionally reserved for free-standing homes.
Sales Activity
Sales activity in Perth increased in the September quarter. reiwa.com data projects, once all transactions have settled, sales volumes will exceed 6,000, up from 5,730 in June quarter. Interestingly, despite softer market conditions this quarter’s projected sales figure is not far off the 10 year quarterly average of 6,780. Given the challenging economic factors facing the state, it’s a testament to the strength of our local market that sales have held up relatively well throughout the downturn.
Listings for Sale
Listing stock levels in Perth continued to improve in the September quarter, declining from 14,071 at the end of June 2017 to 13,043 at the end of September. This is 7.3 per cent lower than the figure recorded at the end of June 2017 and 7.9 per cent lower than the figure recorded at the end of September 2016. After a prolonged period of rising listings across the metro area, it’s encouraging to see substantial declines occurring.
Average Selling Days and Discounting
It took Perth sellers on average 70 days to find a buyer for their property in the September quarter, which is two days slower than the June quarter, but two days faster than the September quarter 2016. The proportion of vendors required to discount their asking price improved to 53.4 per cent in the September quarter. This is 1.8 per cent less than the June quarter and 4.5 per cent less than the same time last year.
Summary
Market conditions remain challenging in the Perth metro region, but the results of the September and June quarters signal we may have turned a corner. With the median house price remaining stable, sales activity trending up and listing levels declining, this has created improved net demand across the metro area and contributed to the healthy sales figures we’ve seen this quarter.

By Hayden Groves – REIWA President https://reiwa.com.au/

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