The tide appears to be turning in Western Australia, with Perth recording some encouraging capital growth and rental growth figures during the first quarter of the year.
According to the latest figures from the Real Estate Institute of Western Australia (REIWA), Perth’s median house price increased by $2,000 during the March quarter of this year – reaching $467,000.
This is especially encouraging news for Perth, says the REIWA, as it represents two consecutive quarters of growth following seven quarters of decline.
“The median house price isn’t the only measure of the market, but when we look at the other indicators from the quarter we find it’s generally a pretty good picture,” said REIWA President David Airey.
“The gap between the asking price and the selling price in Perth has also closed further, dropping to 6.4 per cent from 7 per cent in December. This trend suggests that more sellers are meeting the market and that pricing is being done with greater confidence as the median price levels out.”
He added that the rental market in the metropolitan Perth market saw a strong performance during the March quarter.
“The median rent in Perth lifted by $20 to $400 per week, or 5% from the end of last year. This has been prompted by a tightening of the vacancy rate to 1.9 per cent, well under the accepted equilibrium of 3 per cent,” he said.
“REIWA property managers are still reporting strong interest in rental accommodation at home opens, with many people looking through properties to secure a place to live.”
He added, however, that renters are starting to take the plunge into home ownership, and this trend will most likely ease the pressure on the rental market as the year progresses.
“I think over the last eighteen months many potential buyers have lacked the confidence to purchase, as they watched the median price coming down in weak national and international economies, but now that things are picking up and the housing market has bottomed out, they are returning,” he said.
Other observations included:
- In the metropolitan area the median price of grouped dwellings such as units, apartments and villas grew by 2.5% cent to a median of $400,000.
- The total number of properties on the market increased 6% since December, however the total number of dwellings sold jumped by 13 per cent; the highest turnover in two years.
- The number of sellers who are dropping their asking price can be a good barometer of the market, and March quarter data show this has fallen 3% 65% cent of sellers in the market.
“The gap between the asking price and the selling price in Perth has also closed further, dropping to 6.4 per cent from 7 per cent in December. This trend suggests that more sellers are meeting the market and that pricing is being done with greater confidence as the median price levels out,” said Airey.
Outside of the state capital the median price for houses grew by 4%, or $15,000, to hit $380,000, but the RIEWA noted that units and apartments in the regions “remained steady” at $335,000.
All in all, however, Airey is confident that the worst is now behind the WA property market, and that there are reasons for optimism going forward.
“There is often a slump in the market during the winter months, but I’m confident that for the remainder of this year we will see sales turnover increasing and the median price gradually lifting as our state maintains its good economic growth and positive population trend,” he said. “It’s not a boom but it does look like a welcome return towards more normal market conditions.”
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