Perth to set new record for property price decline
Courtney Trenwith September 16, 2011 - 1:35PM
Thousands of WA home owners are refusing to sell in a poor market, causing a drop in listings.
Perth's median house price is on track for a record sixth consecutive decline, with thousands of home owners refusing to sell in a poor market, the peak industry body says.
The number of properties for sale in the city has shrunk by 11 per cent since the end of June to a healthier 15,500, according to the Real Estate Institute of Western Australia.
It had been close to 18,000, which is 50 per cent more than the market needs to meet demand, heavily tilting market power towards buyers. Advertisement: Story continues below
However, REIWA's research boss Stewart Darby said the drop in listings was not the result of higher turnover.
"What we are witnessing is a large number of sellers simply taking their properties off the market rather than stock being diminished through sales," he said.
Those who were selling had been forced to give way to buyers holding onto their wallets.
"Our members are also reporting that there is less discounting going on with sales, which suggests that sellers are finally getting the message and agreeing to price their properties to meet the market and not to hold out for unrealistic expectations," Mr Darby said.
The pressure to keep prices down has helped influence strong activity from first-home buyers, which presently account for one-quarter of Perth buyers.
Mr Darby said the increased sales at the bottom of the market (below $450,000) had skewed the city's median house price, which had fallen 2 per cent, or $10,000, since June and was highly likely to drop further in the final September quarter figures.
That would mean prices had consistently declined since the second quarter of last year and were back to 2007 levels.
Perth's median house price at June was $477,000, according to REIWA's final data.
"It looks like it will settle at around $467,000 or below by the end of the September quarter," Mr Darby said.
"However, it's important to note that strong activity from first-home buyers is contributing to the fall in median price.
"Prices are moving down anyway [though]. There's been some corrections in the market."
Although the decline is the longest on record, Mr Darby said the total value of the fall was still less than that experienced during four quarters in 2008 when the price "crashed" by 12 per cent.
At the same time, rents are soaring in Perth, rising $25 in the first six months of the year.
The rental vacancy rate shrunk to 3.1 per cent in the three months to August and is expected to fall further, according to REIWA.
There are now only 3000 properties for lease in the metropolitan area, compared to 3600 in June.
As a result, the median rent jumped by 4 per cent, or $15, to $395 per week during July and August, after increasing by $10 per week in the March quarter.
"We have not seen any mid-year rent increases for some time," Mr Darby said.
Perth to set new record for property price decline
Courtney Trenwith September 16, 2011 - 1:35PM
Thousands of WA home owners are refusing to sell in a poor market, causing a drop in listings.
Perth's median house price is on track for a record sixth consecutive decline, with thousands of home owners refusing to sell in a poor market, the peak industry body says.
The number of properties for sale in the city has shrunk by 11 per cent since the end of June to a healthier 15,500, according to the Real Estate Institute of Western Australia.
It had been close to 18,000, which is 50 per cent more than the market needs to meet demand, heavily tilting market power towards buyers. Advertisement: Story continues below
However, REIWA's research boss Stewart Darby said the drop in listings was not the result of higher turnover.
"What we are witnessing is a large number of sellers simply taking their properties off the market rather than stock being diminished through sales," he said.
Those who were selling had been forced to give way to buyers holding onto their wallets.
"Our members are also reporting that there is less discounting going on with sales, which suggests that sellers are finally getting the message and agreeing to price their properties to meet the market and not to hold out for unrealistic expectations," Mr Darby said.
The pressure to keep prices down has helped influence strong activity from first-home buyers, which presently account for one-quarter of Perth buyers.
Mr Darby said the increased sales at the bottom of the market (below $450,000) had skewed the city's median house price, which had fallen 2 per cent, or $10,000, since June and was highly likely to drop further in the final September quarter figures.
That would mean prices had consistently declined since the second quarter of last year and were back to 2007 levels.
Perth's median house price at June was $477,000, according to REIWA's final data.
"It looks like it will settle at around $467,000 or below by the end of the September quarter," Mr Darby said.
"However, it's important to note that strong activity from first-home buyers is contributing to the fall in median price.
"Prices are moving down anyway [though]. There's been some corrections in the market."
Although the decline is the longest on record, Mr Darby said the total value of the fall was still less than that experienced during four quarters in 2008 when the price "crashed" by 12 per cent.
At the same time, rents are soaring in Perth, rising $25 in the first six months of the year.
The rental vacancy rate shrunk to 3.1 per cent in the three months to August and is expected to fall further, according to REIWA.
There are now only 3000 properties for lease in the metropolitan area, compared to 3600 in June.
As a result, the median rent jumped by 4 per cent, or $15, to $395 per week during July and August, after increasing by $10 per week in the March quarter.
"We have not seen any mid-year rent increases for some time," Mr Darby said.
What about you Black Panties ? I'd be fascinated to hear your take on this. Any thoughts ?
No he isn't here, but I am.
Frankly I think the falls in Perth and Brisbane are just about over. Still some way to go in tourist areas like the Gold Coast, but they won't be far off, and they have seen 30% to 40% falls, which for the uninitiated is not that unusual for the Gold Coast.
I guess grabbing a sensationalist headline helps you restore some confidence in your inner beliefs, but in the end it's the market that will determine where it will go.
We will all have to wait and see.
Any expressed market opinion is my own and is not to be taken as financial advice
I expected the topic title to have been posted by a bull - was surprised to see it was posted by muzza. If the recent relatively tiny correction in the Perth market, after tripling within 10 years, is the worst that has ever happened in the history of property in Perth then it is a great endorsement for the performance and safety of property.
I expected the topic title to have been posted by a bull - was surprised to see it was posted by muzza. If the recent relatively tiny correction in the Perth market, after tripling within 10 years, is the worst that has ever happened in the history of property in Perth then it is a great endorsement for the performance and safety of property.
I expected the topic title to have been posted by a bull - was surprised to see it was posted by muzza. If the recent relatively tiny correction in the Perth market, after tripling within 10 years, is the worst that has ever happened in the history of property in Perth then it is a great endorsement for the performance and safety of property.
Yes Turdberg property can go up and can go down. My own first property bought in Sydney in the late 80's also tripled in a much shorter period of time. But that was then and this is now. And if you feel that this report is bullish you are a bigger fool than I thought.
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