It looked like Perth investors started to see better returns in October, as the median house price and leasing activity in the state increased.
The Real Estate Institute of Western Australia (REIWA) reported that Perth’s median house price hiked 1% to $510,000 over the period.
REIWA President Damian Collins linked the shift to the weather, noting that values began to strengthen after weakening in winter.
“In a city renowned for its sunshine, the Perth market tends to slow during the cold wintery months. Thankfully, we’re well into spring now which has translated into renewed enthusiasm in the market with more sellers listing their property for sale and prices improving,” he said.
The results did not coincide with the Hedonic Home Value Index for October of CoreLogic, REIWA’s data partner. Records of the latter showed that house prices in Greater Perth dropped 0.8% during the month.
REIWA explained that the difference between its website’s median house price and CoreLogic’s Hedonic House Value Index was the type of measures used to monitor change in values.
“The Hedonic Values Index aims to capture the entire property market including what has and hasn’t sold recently. reiwa.com’s median house price is based on actual sales and suggests that the properties that are selling are beginning to sell at higher prices than a month ago,” the industry group said in its disclosure.
Collins noted that the data from CoreLogic’s Hedonic Home Value Index coincide with the fact that Perth’s property market remains in the bottom territory, but is poised for a rise given that the worst of the downturn had passed.
“We should see uplift as buyers and investors take advantage of current market conditions,” he added.
REIWA revealed the top performing suburbs for median house price growth among the properties that was bought. These included Roleystone, South Perth, Como, Atwell and Doubleview. Spearwood, Gosnells, Secret Harbour, Karrinyup and Forrestfield also posted positive results.
Also part of the report was the improved listing stock for sale in October, up 7.8% compared to September.
'“This is a seasonal trend that we’ve observed for a number of years now, even during the boom, with listings typically increasing in October and November as vendors become more motivated to sell in the lead up to Christmas,” Collins noted.
The 10 suburbs with the biggest growth in listing stock (percentage wise) were Kensington, Cottesloe, Glen Forrest, Greenwood, Shenton Park, Mount Hawthorn, East Fremantle, Nedlands, Brentwood and South Fremantle. Only two of the suburbs mentioned have median house prices above the Perth Metro median. Seven of these suburbs, meanwhile, have medians above $800,000.
It was also highlighted that more people were enthusiastic to do a quick sale at a competitive price in the higher-end suburbs where there is good buyer demand. This resulted to higher activity in the luxury end of the Perth market.
Finally, the rental market also registered gains with leasing activity hiking 10% during October.
The 10 suburbs to experience the biggest improvement in leasing activity (percentage wise) were West Leederville, Cannington, Southern River, Bertram, Nedlands, Palmyra, Craigie, Madeley, Secret Harbour and Morley. Listings for rent sank 5% five and now, sit below 7,000 for the first time since March 2015. On the other hand, median rent price was still at $350 per week.