The second half of the year could prove to be a pivotal period for the Perth property market, as its declining level of stock on the market puts pressure on both prices and rents, it has been claimed.
According to the latest Real Estate Institute of Western Australia (REIWA) data, the number of properties for sale in Perth (12,975) is now at its lowest level since April 2010. The declining number of properties for sale, combined with a steady increase in the number of reported sales, suggests that rents and prices could be on the up.
REIWA deputy president Ian Cornell has noted that, while sales numbers heading towards long-term average levels is a good sign that the Perth property market is overcoming its confidence issues, a “dramatic collapse” in building approvals could see the market turn significantly.
“If this persists for a few more months we will see a fall in new dwelling starts for both the June and September quarters,” he said.
“This will ultimately lead to a supply imbalance that will, in turn, put pressure on established housing. The knock-on effect will ripple through the existing residential housing market and put price pressure on both buyers and renters for the latter half of 2012.
“In April, building approvals slumped by an extraordinary 46.7%, which means that buyers are now turning to the existing market and stock numbers are falling.
“Ultimately, this means that the increased competition for houses and rental properties on the market will push up the prices for both as we move into spring.”
The news comes on the back of the Real Estate Institute of Australia’s (REIA’s) Housing Affordability Report finding that housing affordability in Western Australia fell by 1.2% over the March quarter.
“Of more concern is the affordability pressure on people in the rental system. The proportion of income required to meet the median rent in Perth grew by 0.7% in the March quarter and now stands at almost 21%,” said Cornell.
“The good news is that the number of first home buyers increased by 4.1% in the quarter, up by a whopping 36.4% on March last year.”
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