Prices down, rents down; Perth's trend of decline continues: David Airey

Initial analysis by the Real Estate Institute of Western Australia for the September quarter indicates that the declining trend in Perth’s median house price as reported over the past two months has continued.

Real-time sales data by REIWA members is showing a 2.8% fall in the metropolitan median with Perth now showing a median of around $508,000 for September, down from the revised June quarter median of $522,500.

The data is not surprising given strong first home buyer activity at the more affordable end of the market pulling down the median. However, with first home buyer activity starting to slow I expect the decline to turn around in the December quarter.

We reported 2001 sales in the month of September and even though that figure is up by 13% on the same time last year, it’s a drop of 4% in sales since August.

The south-east part of metropolitan Perth is the only area with significant sales movement where more affordable homes in Gosnells and Armadale are attractive to buyers. Turnover jumped by 8 and 12% respectively.

We also saw a modest lift in turnover in the western suburbs, northern Joondalup and the north eastern part of Wanneroo, however, this was based on small sales volumes.

Areas with weaker sales turnover included the northwest area of Wanneroo (down 21%), Bassendean and Bayswater (down 19%), and the cities of Swan and Canning, both down 9%.

There were 8,693 properties listed in September, down by 6% on August and down 16% on last year.

Of the properties for sale 7,527 were dwellings and showed a drop of 5% on August, while 1,166 were blocks of land, down by 6% on August.

REIWA data also show that the rental system is cooling with median rents dropping by around 1% as the metropolitan vacancy rate rests at a normal 3.1% of available properties.

We now have around 3,843 rental listings in the market place which is down by about 6% over the last three months but still well above the same time last year at 81%.

Within this context the median rent has dropped back to $470 per week, or around $475 for a house – down by $5 on the June quarter and $450 for a flat, unit, apartment or villa – down by $10. REIWA data is now highlighting the expected fall in rents anticipated in several sub-markets.

As REIWA has previously predicted, the rise in the vacancy rate is now seeing a softening in rents in a number of areas.

Median rents have come down by $10 per week in Bayswater and Bassendean, $15 in Fremantle, $22 in Melville, $30 in the City of Perth, $25 in South Perth and Victoria Park, $20 in Vincent, $25 in the western suburbs, $23 in Mundaring, $20 in north-west Wanneroo, $10 through northeast and southern Wanneroo, $10 in Cockburn and also $10 in Rockingham.

Around 65% of vacant rental properties are broadly within a 10km radius of the CBD and that this central sub-region witnessed a decrease in listings during the September quarter.

However, some sub-markets such as Bassendean-Bayswater, Belmont and South Perth-Victoria Park saw increases in listings of between 5 and 16% for the quarter.

In the eastern part of the City of Stirling, places like Joondanna, Yokine and Tuart Hill saw an increase in listings of around 5%.