Home sellers are starting to get accustomed to the new market conditions, as some are already willing to test the market by listing their properties for sale, particularly in one unlikely city, according to the latest report from CoreLogic.
Over the week to 20 September, new listings increased by 0.7%, driven by the strong jump in Sydney. However, Perth was the unexpected stand-out performer — it followed Sydney in terms of the increase in new listings.
"Perth and regional Western Australia were the only dwelling markets where new listings volumes exceeded the numbers in the equivalent four-week period of the previous years," said Eliza Owen, head of residential research at CoreLogic.
Sales activity in Perth is also showing signs of life. Of all capital cities, Perth is the only one that recorded a six-month average sales volume that is above the pre-COVID-19 average.
Owen said not only does the increasing activity show confidence in the Perth market, but it is also supporting "mild" value gains across Perth. In fact, Perth's home value index has already increased by 0.6% in the 28 days to 23 September.
While these developments might be surprising during a recession, Owen said there might be factors that could explain them. For one, the Western Australian economy has actually been supported by a 4.8% increase in mining investment over the year.
Furthermore, ABS payroll data show that since the start of the pandemic, payroll jobs across the state fell by less than 1%, compared with national decline of 4.5%.
Perth's affordability also helped. Values in the city sit 22% below the record dwelling value in June 2014.
"A consistent upswing in Perth property values will depend on the resilience of the market through the end of mortgage repayment deferrals, whether there are further reductions in the cash rate, and how successfully COVID-19 can be contained," Owen said.
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