It has been a stellar couple of years for Perth’s housing market – but it looks as though the good times might be tapering off.

According to REIWA president David Airey, the prognosis for the market is not promising, with a downturn in 2015 likely.

While the latest REIWA data shows the median price has lifted slightly, sales turnover is at its lowest level in two years, sale listings are trending upwards and rents are falling.

In fact, the number of listings are likely to smash through the 12,000 barrier shortly, Airey said.

“Perth’s equilibrium for listings in a balanced market is around 12,000… Indications are that we will clearly surpass this in 2015, which will add to selling days and put downwards pressure on price,” he said. 

Airey offered the following figures as further evidence for his warning of a downturn:

  • Sales turnover is 12% below average.
  • Average days on market have gone up to 59.
  • The number of vendors dropping their asking prices have gone from 48% to 51%.
  • There is 50% more rental properties available for lease than there was at this same time last year.
  • The vacancy rate is 4% and owners are taking an average of 33 days to find a tenant.
  • Rents have softened to 4% below the median price from the same time last year.
Perth’s rental market is struggling because it currently has 2,000 properties more than is needed to balance supply and demand.

Airey said the increase in stock was mostly due to weakening demand for rentals as migrations slowed.

“The extent to which the low level of sales, increase in listings, soft rental market and low consumer sentiment might influence the housing system in the longer term may become apparent in the December quarter,” he added.

Meanwhile, the latest RP Data CoreLogic Home Value Index results show that Perth experienced a -0.1% decrease in dwelling values over October and a -0.2% decrease over the quarter.

RP Data research director Tim Lawless said that Perth has clearly moved through the peak of its growth cycle.