Perth median house price up in December quarter to $465,000, first rise in almost two years

Perth house prices may have finally bottomed out, with the Real Estate Institute of Western Australia recording its first median dwelling price rise since March 2010, while property listings are also at near two-year lows.

The Perth median house price increased by 0.5% in the December quarter, putting the current median at $465,000; up by $5,000 on the revised September quarter figure. 

The number of properties on the market fell by 12% to 13,500 over the quarter, their lowest level since May 2010 – Perth’s long-term average is about 12,000 listings. 

In a further sign that the market is stabilising, REIWA figures show that discounting fell from 7% to 4.2% over the quarter once sales that achieved or exceeded the asking price are factored in. 

Lastly, the rental market has tightened from 3.4% to 2.3% over the past 12 months, with median weekly rents for houses rising $20 to $420 over the December quarter. 

REIWA president David Airey says the shift in median price is largely insignificant because it was “triggered by an increase in trade-up buyers countering the influence of first-home buyers”. 

“First-home buyers have been skewing the median downwards by generating large sales volumes of more affordable homes, but now this has been balanced with more upgrade buyers in the market, who tend to purchase the more expensive properties,” Airey says. 

“REIWA data show that while first-home buyers continue to be increasingly active in the market, we saw an increase in trade-up buyers during the December quarter and an increase in house sales of around 6% to 7%, which may have put a floor under prices.” 

“It’s a similar situation in the multi-residential sector with units, apartments, villas and townhouses also experiencing an increase in turnover and a 1% increase in median price,” he says. 

Airey says the drop in listings is not unexpected and reflects a seasonal decline over the holiday period when some sellers remove their properties from the market until the new year. 

“We may see listings swell towards the end of March as they have done in some previous years, so we’ll be watching that.” 

However, he says it is encouraging that listings are currently 12% lower than the same time last year and “well down on the peak of 18,200 we saw in April last year, which pushed prices down,” he says. 

“The number of houses for sale has fallen to its lowest level since March 2010, while land remains over represented with 2,800 lots on the market. 

“The housing market seems to be stabilising, with an increasing number of sellers adopting more realistic asking prices, with both the number of sellers discounting and the average discount both coming down in the quarter,” he says.

According to Airey, the rental market is the emerging pressure point in the housing system, with the vacancy rate tightening further and rents for houses increasing. 

“Our preliminary data show the vacancy rate dropping to 2.3% in the quarter and well down on the 3.4% from the same period last year. While the median rent for units and apartments remains steady at $380 per week, it has increased by $20 for houses to $420 per week,” he says. 

The overall median rent for Perth has reached $400 per week, representing an increase of 8.1% over the last year. 

“It’s evident there is greater confidence retuning to the property market reflected in the increase in sales activity in the December quarter and the fall in listings we saw across 2011. 

“This bodes well for a positive start to 2012, but we still maintain some level of cautiousness given the global economic situation despite WA having a more robust economy,” Airey says.

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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