Falling residential stock on market could push up dwelling prices in Western Australia: REIWA
The number of properties on the market in Western Australia has fallen over the June quarter, with could put price pressure on property there, according to the Real Estate Institute of Western Australia.
Sales numbers have increased, but new stock is not coming onto the market quickly.
“The volatility has gone, buyers are more confident and prices are stable. But if we don’t see the sold stock being replaced with new listings it may put price pressure on the limited stock that remains or increase demands on the building industry,” says REIWA’s David Airey.
Turnover for the months of April, May and June is up by 25% from the same period in 2011, with a projected 11,700 sales taking place in the quarter. In the March quarter it was at 11,600. The number of properties on the market dropped to 12,150 at the end of June and currently sits at around 11,000.
“This is well below the 14,300 properties we had on the market in March and sits below the equilibrium of around 12,000 listings, suggesting the market is swinging back to favour sellers,” Airey says.
The south-eastern Perth suburb of Canning Vale near Jandakot airport had the most sales for the quarter at 512. The median price increased 0.1% over the quarter to an annual median of $530,000.
He says the metropolitan Perth median house price is holding steady at $475,000. The figure is unchanged over the quarter and down 1% over the year. The median Perth unit price is at $324,500 down 3.1% from the March quarter and down 7.9% over the year.
House and unit sales in Perth are up around 5% for the quarter but Airey says this has been moderated by softer regional activity during this period, with house sales down an estimated 12% and the small multiresidential market down by 15%.
“In annual terms, house sales in Perth are up by 15% in 2011-12 when compared to 2010-11, but still remain some 15% below the 15 year average. Similarly, multi-residential sales are up 5% for the year but still 30% below the long term average due to weak investor activity.”
The number of sellers dropping their asking prices to get a sale has fallen by 13 percentage points on June last year, with 61% of sellers prepared to discount. The average reduction is 6.3%.
The time on market has also dropped by almost a week to an average of 73 days on market.
| JUNE | MARCH 2012 | % 3 months | % Change 12 months |
Perth Median | $475,000 | $475,000 | n.c. | -1.0% |
Regional WA | $360,000 | $375,000 | -4.0%. | -4.0% |
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Perth Median | $402,500 | $407,250 | -1.2% | -1.6% |
Regional WA | $324,500 | $335,000 | -3.1% | -7.9% |
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Perth Median | $250,000 | $245,000 | +2.0% | +6.4% |
Regional WA | $168,000 | $165,000 | +1.8% | -4.0% |
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Total Dwelling | 11,700 | 11,600 | +1% | +25% |
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Stock of | 12,150 | 14,300 | -15% | -30% |
Average Selling | 73 days | 79 days | -6 days | -6 days |
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Perth Seller |
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Vendors Reducing | 61% | 65% | -4% pts | -13%pts |
Listing & Selling | -6.3% | -6.4% | -0.1% pts | -1.2% pts |
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Perth Rental | 1.9% | 1.8% | +0.1% pts | -1.5% pts |
Median | $430 | $420 | 2.4% | +13.2%. |
In the Perth rental market the vacancy rate is below average at 1.9%. The median rent has grown by a $10 to $430 per week, an increase of just over 13% from 12 months ago.
The median rent is $440 per week for houses and $410 per week for units and apartments.
Median land prices are up $5,000 for the quarter to $250,000.
“Our preliminary data is showing a 25% lift in land sales, suggesting that prospective home builders are getting ready for their new home,” Airey says.
“Suburbs such as Baldivis, Butler and Byford on the outer edges of the metropolitan area saw the greatest number of land sales in the year to June quarter.”