Perth house prices dip, rentals fall in December quarter: REIWA data

Median house prices fell in Perth in the quarter ended December from the comparable quarter a year earlier, although the results reflected trends seen throughout 2015, preliminary data from REIWA shows.

The December quarter showed the expected impact the Christmas and New Year period traditionally has on the property market, said REIWA President Hayden Groves.

“It’s not uncommon to see a fluctuation in the market at this time of year as it is typically a quieter time in WA real estate. Properties come off the market over the holidays and sales tend to drop off,” he said.

“We get a much clearer picture of how the market is travelling when comparing the data to the December 2014 quarter.”

Houses and units 

Perth’s preliminary median house price came in at $530,000 for the three months to December 2015.

“This is down 0.2 per cent on the revised September 2015 quarterly median and down five per cent when compared to the December 2014 median, however on an annual basis for the year to December 2015 Perth’s median house price held firm dipping just 1.8 per cent,” Groves said. 

Median price for units in the quarter fell 2.2 per cent from the year-ago quarter, though it was up 1.2 per cent to $435,000 over the quarter.

Further, 35 per cent of all house sales in the Perth metro area were in the $360,000 to $500,000 price range. 

“This shows us that first home buyers are still very active and recognise that there is an opportunity in the current market to take the step into home ownership,” Groves said. 

Sales volumes in the $500,000 to $750,000 price range weren’t far behind, making up 32 per cent of total sales volumes in the December 2015 quarter. 

Groves said activity in this bracket tended to be from current home owners who wanted to upgrade to their next home. 

Listings 

Listings for sale fell 3.8 per cent to 14,551 in the December quarter, following a peak of 16,969 in November. 

“It’s not uncommon for listings to drop off at this time of year as traditionally properties are taken off the market around the holiday period before returning to normal levels in the New Year,” Groves said.

“When we compare this figure to the December 2014 quarter we see, as was the case throughout 2015, listings are still higher than the long-term average.”

Sales volumes 

Sales volumes for the three months to December, however, fell sharply to 5,909 from 9,176 in the September 2015 quarter. 

“We estimate that once all sales have settled in the coming months the total number of dwelling sales in WA will come in at around 6,500 for the quarter,” Groves said. 

Selling days and discounting  

Average selling days in the Perth metro area were 59 days in the December quarter, again 13 days more than a year earlier.

“Additionally, 47 per cent of vendors needed to discount their asking price in order to sell in the December quarter, which is an improvement on the September quarter but higher than for the three months to December 2014,” Groves said.

Rental market 

Perth’s overall median rent price in the quarter came in at $400 per week, down $40 from a year earlier though it was steady on the September quarter.

For houses, it was $410, and for units $380. 

Rental listings increased to 9,532 in December from 8,267 in September, while the vacancy rate rose to six per cent. 

Investors were faced with short-term challenges, but it was a good time for tenants to secure a lease at more affordable prices.

“Migrations trends have changed rapidly in WA over the last six months and housing supply has increased. This has caused demand for rental housing to lessen putting downward pressure on prices. 

“The property market is cyclical and long term the projected population growth in WA is still expected to continue which will soak up stock and even out the imbalance we’re seeing,” he said. 

Regional WA 

Results were mixed across regional WA, with regions in the state’s north continuing to adjust, while those in the south were generally more stable. 

Top performers in the quarter were Augusta-Margaret River with 6.5 per cent growth to its annual median house price, followed by Blackwood with a modest increase of 0.7 per cent. 

Groves said the North West sub-region was still feeling the impact of the shift to production in the mining sector, with annual growth in the Kimberley and Pilbara regions declining 3.6 per cent and 26.6 per cent respectively. 

“These areas are experiencing an adjustment as construction slowed down significantly in a short period of time changing the employment requirements. However, when we look at the longer term growth rates for these areas we can see they have declined at a much slower rate,” Groves said.