Perth beats Sydney in flat February housing market as Wall Street Journal warns of housing ‘creaks’

The housing market remained in neutral in February, with Perth the standout market, according to Residex.

Perth house prices appreciated by 2.32% in February to a median of $478,500, and unit prices lifted 2.1% to a median of $382,500.

Sydney house prices lifted 1.35% over February to a median house price of $657,000 while units fell 1.2% to $483,500.

Overall house prices lifted 0.42% over February while units fell by 0.49%.

Melbourne’s housing market continued to decline, with house prices dropping just over 1% to $558,500 while Brisbane house values fell 1.12% to $422,500.

Over the last three months, Melbourne house prices have depreciated the greatest among the major capital city markets falling 2.75%.  It also the weakest performing capital city over the past 12 months with house prices down 6.57%.





Median price

Change over Feb

Median price

Change over Feb









































Source: Residex

The February Residex results come out as a report in the Wall Street Journal claims the Australian housing market “party” is coming to an end.

“Australian home owners sidestepped the worst of the global financial crisis as the country's housing market held up well. But the party looks close to an end,” writes the WSJ’s Cynthia Koons.

“Despite the country's resource riches, the economy is faltering. Corporate profits are down and the unemployment rate is worsening. When commodities prices dropped in the fourth quarter, gross domestic product growth disappointed.”

Koons says such weakening data is flowing through to the property market, highlighting the 7.3% drop in new home sales in January, the recent weak ABS mortgage lending figures and recent drop in capital city house prices.

Worse, she says Standard & Poor's has calculated the Australian household debt-to-income ratio at about 150% higher than the ratio in the US just before the subprime mortgage crisis in late 2007.

“Meanwhile, Australia's major banks have been forced to increase mortgage rates due to the higher cost of funding in global markets. Faced with a slowing economy and higher interest payments, Australians are surely more likely to pay down debt rather than borrow more to fund home purchases,” Koons adds.

Residex CEO John Edwards does not share this gloomy outlook, predicting that the housing market is about “three-plus months away from any Australia-wide pickup”. 

Edwards bases this prediction on demand for Residex’s predictions reports, which are bought by investors ahead of a property purchase.

Click to enlarge

“As you can see, report sales have dramatically increased since mid-2011, indicating that our housing market is about to start moving forward as activity increases,” he says.

“If the sales activity for each state was equally spread based on housing population, we could assume that all markets in Australia are about to move forward and that the worst is over, however as it turns out, our Predictions Report sales activity is limited in some states.

“Currently, interest surrounds Western Australia, New South Wales and Queensland, while activity for the Melbourne market is about 50% of that in both of Sydney and Brisbane.

“Perth is exhibiting an increase in sales activity also, but only at 15% of the sales activity occurring in Sydney and Brisbane.

“The western capital city has experienced such a significant downturn that investor recognition of a pending upturn will probably be a little slower in this market compared to others, however it is moving to growth more quickly than we envisaged, and we have been advising that this is the market to watch for a number of months now,” he says.



Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


Be the first one to comment on this article
What would you like to say about this project?