The downturn in Perth's property market appears to be coming to an end after the latest data from the Real Estate Institute of Western Australia (REIWA) showed a recovery in median prices.
During the June quarter, median house price jumped by 3.5% or $15,000 to $445,000 as upgraders return to the market. The sharp increase has virtually wiped up the losses in value from the second half of 2008 according to Rob Druitt, president of REIWA.
"Much of the recovery in median house price over the last six months can be attributed to increasing trade-up activity, and this is reflected in the distribution of sales tending towards more expensive properties," he said.
Druitt also noted a large drop in the number of properties for sale to 12,800 at the end of June. This is 15% lower compared to the March quarter and 26% below the end of June last year.
"At the current rate of depletion, properties for sale, coupled with the expected surge of first homebuyers before the Commonwealth boost ends on 30 September, should see the market move back into a state of equilibrium between supply and demand during the September quarter," said Druitt.
While property values are showing signs of recovery, the rental market is slowing with vacancy rates rising to 3.6% in the same period. The increased number of available rental properties in Perth has led to a $10 drop in median rental payment to around $360 per week.
"The increase in the vacancy rates is significant, having grown 0.7% in March to a level that is now higher than usual for Perth, and its possible this vacancy rate will increase further during the September quarter as more renters become first homebuyers and as some of the retrenched mine workers move back east," noted Druitt.
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