Cheaper Perth suburbs to see an uptick

Perth’s median price is slipping, but it seems it might just be a sign of first time buyer activity driving sales in more affordable areas, according to the Real Estate Institute of Western Australia (REIWA).

Pointing to a slip in Perth’s median house price by 1.4% to $515,000 over the three months to August, compared to the three months to May, REIWA president David Airey said that the cause is quite likely to be first time buyers.

“This appears to be due to the large turnover of more affordable homes skewing the median downwards,” Airey said.

This also appears to correlate to those suburbs currently recording a higher level of stock turnover, which tend to sit at a median price lower than that of Perth overall. For instance, REIWA recorded that the north west and southern parts of the City of Wanneroo had the strongest jump in turnover of between 31% and 36%, with median prices sitting around the $350,000 mark (RP Data).  

Destiny’s Margaret Lomas agreed with Airey’s view that new buyers are behind the overall median price drop.  

“It’s definitely first time buyers as locally, the residents of investors in Perth aren’t quite ready to accept that Wanneroo area may provide some good investing opportunities," Lomas told Property Observer.

“I’d expect to see this change in the coming year or two and those first home buyers will start to see increasing competition from property investors," she said, suggesting a future pick up in these LGAs may be likely.

Further to this, the more affordable areas of Kwinana and Rockingham also saw increased turnover while in the City of Joondalup sales slumped by up to 20% across the LGA. The median house price for the suburb of Joondalup is recorded at $870,000 (RP Data), further suggesting first time buyers are the active segment in the market.

Overall, REIWA recorded a 14% decrease in properties sold when comparing August to May, despite being up by 4% from July.

Perth was one of just two capitals nationally to see a drop over the last quarter, RP Data recently recorded.