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September quarter results show first home buyer boom
Creagh Ferdinands, Wed 12 December 2012

Preliminary data from the Real Estate Institute of Western Australia indicate that Perth’s median house price for the September quarter is currently below the June quarter figure, due largely to earlier settlements from strong first home buyer activity.

PRICES STABLE

REIWA President David Airey said this was an early call on the state of the market and data from reiwa.com suggested the median will lift back to the June quarter reading of $484,000 with late settlements.

FIRST HOME BUYERS

“First home buyers now account for almost 30 per cent of all sales and there is no doubting their impact in the market as they eagerly purchase the more affordable properties,” Mr Airey said.

Mr Airey said the reasonably stable prices and low interest rates over the last nine months have resulted in overall turnover picking up by almost 20 per cent on the same time last year, but that sales from trade-up buyers fell by around 4 per cent during the quarter.

FALL IN TURNOVER

Significant falls in turnover were reported in Rockingham-Kwinana, the eastern and western parts of Stirling, northern Joondalup and the western suburbs.
Despite a drop in turnover for the September quarter, a number of sub-markets defied the trend with increased sales.

These included Armadale-Serpentine, Swan, Cockburn, Vincent, the north east part of Wanneroo and south east section of Stirling.

“Our REIWA members are reporting a 3 per cent increase in sales of flats, units, apartments and villas, but with no movement in the overall median price of $390,000. Again, this preliminary figure is likely to lift when revised to be level with the June figure,” Mr Airey said.

REIWA data for the September quarter show that the stock of listings had fallen 14 per cent to just 10,400 properties and the number of days on market has dropped a little to 71 days.

DROP IN DISCOUNTING

The more stable conditions had seen fewer sellers reducing their asking price and the average variance between asking prices and eventual selling prices had come down, now sitting at just under 6 per cent.

REGIONS

In the regions, the median house price came down slightly to $360,000, while units and villas grew marginally to a median of $327,000. Results are patchy across the breadth of the state.

Mr Airey said the weak market in Mandurah-Murray was definitely on the mend with sales up by 30 per cent on the same time last year. He said Initial readings suggested a rise in the median price in Mandurah, but added that further data was needed before confirming that.

“In Bunbury turnover is up by 25 per cent on the same time last year and with a 3 per cent lift in the median house price.

“Albany has seen negligible movement in price or turnover and the number of listings is down by 17 per cent during the quarter.

“Kalgoorlie–Boulder saw its turnover increase by 25 per cent on last year, but with a stable median price. Listings came down significantly by 35 per cent during the quarter, which also happened this same time last year.

“Geraldton-Greenough seems to be the weakest of the regional markets. Although sales turnover is up by a huge 75 per cent on last year, the median price seems to have dropped by around 3 per cent and the mid-west city is awash with listings, including 325 blocks of land,” Mr Airey said.

Mr Airey said REIWA members in the Pilbara are reporting that the housing pressure has come off in Karratha, with a jump in listings and the vacancy rate for rentals blowing out to 6 per cent.

Despite a slowdown in the mining and resources sector, population growth in WA is stronger than anywhere else in the country and this does not appear to be slowing.

INVESTORS

“Investors still seem hesitant to return to the WA market, but there are signs of this starting to turn around as rental yields improve on the back of rising rents, low interest rates and stable prices.

RENTS

“Despite the large number of first home buyers exiting the rental system to secure their own home, pressure continues on the metropolitan rental system through strong population growth,” Mr Airey said.

REIWA data show that in metropolitan Perth the vacancy rate has tightened from 1.9 per cent in the June quarter to 1.8 per cent in the September quarter, with the median rent sitting at $450 per week, an increase of $20 on June.

 
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