This article is from the Australian Property Journal archive
MEDIAN house prices across Perth are heading towards 2019 with some positive momentum after a relatively flat year, as population growth in Western Australia spells good news for market.
The latest data from the REIWA showed prices lifted by 1.6% to $518,000 during November, marking the second consecutive month of growth.
There was a greater proportion of transactions above $1 million than there were in October, which REIWA president, Damian Collins said contributed to the increase we’ve seen in Perth’s median house price this month.
CBRE figures show Western Australia saw a 21,000 person net population increase over the past 12 months, following a 60,000 drop in 2015.
Gemmill Homes managing director, Craig Gemmill said the data shows marked change from the “doom and gloom” that has existed for the past few years, and predicted good times for the market.
“This is the first step in the recovery of Western Australia,” Gemmill said.
“It’s really exciting, as there’s two real positives that come out of the population growth.
“Existing housing stock get soaked up. That affects supply and people then go to the next level of pricing or they build. It will really stimulate the market.”
Top selling suburbs in November included Willetton, Baldivis, Canning Vale, Duncraig and Ellenbrook, while Quinns Rock, Willetton, Doubleview, Leeming and Wellard had the biggest improvement in sales volumes (percentage wise).
“While overall sales activity in the Perth Metro region remains subdued, numerous suburbs bucked this trend during November to record notable improvements in sales,” Collins said.
Listings were 5% higher at the end of November than they were at the end of October.
“It’s not unusual to observe increases in listing stock at this time of year. Sellers are returning to the market following the lull of the winter period and wanting to get in quick before the holiday season ramps up.
“With listing stock rising, buyers have a good supply of choice available to them, making it a very good time to buy,” Collins said.
The population growth is also impacting vacancy rates, which have been crunched from a peak of 7.3% in July last year to 3.3% in November, according to the REIWA data.
Median rent prices across Perth were steady at $350 per week, while unit rents increased by $5 in November to $330 per week, and is now $10 above its levels three months earlier.
Gemmill said the market is back more in favour of the landlord.
“Investors need at least 5% return. The average now is around 5.5%. When you claim two per cent depreciation, that leaves a seven percent return. That’s before investors have even claimed back their borrowing costs. So, in this market where interest rates are low, you can get a great return of investment.”
The biggest increases in leasing activity during November were seen in Kardinya, Coolbellup, Bedford, Kelmscott and Harrisdale, while Perth, East Perth, Scarborough, South Perth and Baldivis had the most number of leased properties, the REIWA said.
Rental listings were stable over the months, remaining below 7,000, marking a 25% decline compared to the same time last year.
“The rapid decline in listings we’ve observed this year is a key driver behind the rental market’s recovery,” Collins said.
Australian Property Journal
