Stable market conditions prevailed in Perth
in September, with the city’s median house price remaining steady for the third straight month, according to the Real Estate Institute of Western Australia (REIWA).
Perth’s median house price adjusted back marginally by 1% to $510,000 for the three months to September – a shift which prompted REIWA president Hayden Groves to say that the market had levelled out.
“While it is never easy to accurately call the bottom of the market, recent trends indicate the market has levelled out, which is very pleasing,” he said. “Perth’s median house price has remained stable over the last couple of months, and similarly, so has Perth’s median rent price.”
Activity levels (i.e. sales and leasing) boasted healthy levels in the first half of 2017, which signals confidence in the market is returning. “The slowdown of sales and leasing levels in August and September is very typical for this time of year and we expect to see activity levels pick up in both sectors in October and November,” Groves said.
“Listings levels have also improved in both market sectors, with sales and rental stock trending down after peaking in March 2017. The reduction in listings bodes well for the recovery of the market as it signals supply may have finally peaked. If current trends continue, we should start to see house and rent prices remain flat, or even begin to trend higher, as the demand side of the equation begins to slowly match supply levels.”
Data from REIWA indicates that listings for sale in Perth were reduced by 1% in September, and were down 8% when compared to September 2016. In the city’s rental market, listing levels were down by 3% over the month, and had declined by 9% over the year.
“It’s very encouraging to see stock levels across the market continue to reduce, especially when we compare levels for both sectors on an annual basis. If this trend continues, we should see a better balance between supply and demand of stock start to emerge,” Groves said.
Despite the mostly stable conditions, activity levels in both the sales and rental markets did experience a reduction over the month, with 1,481 preliminary sales recorded and 4,266 properties leased.
“Historically, sales transactions tend to slow at the start of spring due to a mixture of school holidays, public holidays and the AFL footy finals. Activity generally starts to ramp up as the warmer weather hits in October, with the peak traditionally occurring in November. Based on this, we are expecting to see transactional activity increase in the coming weeks,” Groves said.
Is now a good time for investors to snap up investment properties?
According to Groves, Perth presents great opportunities for investors looking to snap up properties at approximately half the price and with higher yields than those found in east coast markets like Sydney.
“Despite the downturn in the resources sector and the slowing population growth, the latest state budget estimates indicate WA’s economy may have finally reached the bottom, with favourable forecasts estimated for population and employment growth. This would bode well for prices in both the rental and established markets, providing investors with an opportunity to secure a rental property in Western Australia with a view of long-term growth for their asset.”
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