Strong first-home buyer activity in WA as sales turnover trends down

Preliminary data indicates that Perth’s median house price for the September quarter is currently below the June quarter figure, largely due to earlier settlements from strong first-home buyer activity.

This is a preliminary call on the state of the market, and data from reiwa.com suggests it will lift back to the June quarter median of $484,000 with late settlements.

First-home buyers now account for almost 30% of all sales, and there is no doubting their impact in the market as they eagerly purchase the more affordable properties.

The reasonably stable prices and low interest rates over the last nine months have resulted in overall turnover picking up by almost 20% on the same time last year, but sales from trade-up buyers fell by around 4% during the quarter.

Significant falls in turnover were reported in Rockingham-Kwinana, the eastern and western parts of Stirling, northern Joondalup and the western suburbs.

Despite a drop in turnover for the September quarter, a number of sub-markets defied the trend with increased sales. These included Armadale-Serpentine, Swan, Cockburn, Vincent, the north-east part of Wanneroo and south east section of Stirling.

Our REIWA members are reporting a 3% increase in sales of flats, units, apartments and villas, but with no movement in the overall median price of $390,000. Once again, this preliminary figure is likely to lift when revised to be level with the June figure.

REIWA data for the September quarter show that the stock of listings has fallen 14% to just 10,400 properties and the number of days on market has dropped a little to 71 days.

The more stable conditions have resulted in fewer sellers reducing their asking price and the average variance between the asking price and eventual selling price has also come down, now sitting at just under 6%.

In the regions, the median house price came down slightly to $360,000, while units and villas grew marginally to a median of $327,000. Results are patchy across the breadth of the state.

In Mandurah-Murray, this weak market is definitely on the mend, with sales up by% on the same time last year. Initial readings suggest a rise in their median price but we need further data before we can confirm this.

In Bunbury turnover is up by 25% on the same time last year and with a 3% lift in the median house price.

Albany has had negligible movement in price or turnover, and the number of listings is down by 17% during the quarter.

Kalgoorlie–Boulder  turnover increased by 25% on last year, but with a stable median price. Listings came down significantly by 35% during the quarter, which also happened this same time last year.

Geraldton-Greenough seems to be the weakest of the regional markets. Although sales turnover is up by a huge 75% on last year, the median price seems to have dropped by around 3% and the mid-west city is awash with listings, including 325 blocks of land.

REIWA members in the Pilbara are reporting that the housing pressure has come off in Karratha, with a jump in listings and the vacancy rate for rentals blowing out to 6%.

Despite a slowdown in the mining and resources sector, population growth in WA is stronger than anywhere else in the country and this does not appear to be slowing.

Investors still seem hesitant to return to the WA market, but there are signs of this starting to turn around as rental yields improve on the back of rising rents, low interest rates and stable prices.

Despite the large number of first [home buyers exiting the rental system to secure their own home, pressure continues on the metropolitan rental system through strong population growth.

Our data show that in metropolitan Perth the vacancy rate has tightened from 1.9% in the June quarter to 1.8% in the September quarter, with the median rent sitting at $450 per week, an increase of $20 on June.