South-West slow down may herald changeLand, units jump in price
Today's release of the June quarter figures by the Real Estate Institute of Western Australia shows continued strong growth in the property market, although signs are starting to emerge of a slow down in some regional areas and in Fremantle.
REIWA President Greg Rossen, said the preliminary median price for a home in metropolitan Perth was now $395,000, an 8.2 per rise in the quarter which lifted the metropolitan median by $30,000 over the last three months.
"While this is another very robust period of metropolitan growth, climbing by 34 per cent over the last year, we have also witnessed a downturn in the Bridgetown-Greenbushes region of just over 19 per cent in the quarter, along with a quarterly downturn in Busselton of almost 5 per cent," Mr Rossen said.
Mr Rossen said that homes within the Fremantle municipal area experienced negative growth of 3.4 per cent in the quarter.
"These new and emerging quarterly downturns are worth watching closely to see if they are just caused by seasonality or whether they herald a change that might ripple through the market over the next few months," Mr Rossen said.
However, Mr Rossen emphasised that this had to be seen in the context of many regional areas having experienced very sharp and sudden rises in recent years, compared to Perth's longer and more steady growth in prices.
"It may simply be the case that the sharp prices growth in the regions is now experiencing a market correction and it may have no impact on city trends," Mr Rossen said.Metro median to pass $400K
Mr Rossen said that REIWA is confident that its expected revised median figure for metropolitan Perth was likely to be closer to $415,000, once all final settlements were in and counted in a few week's time.
"This means Perth will likely be breaking through the $400,000 barrier for the first time, over-taking both Melbourne and Canberra and making Perth the most expensive capital city after Sydney.
"Interestingly, the strong percentage growth in prices for the year to June for metropolitan Perth occurred in the upper and lower quartiles of the market, with suburbs like Mosman Park and Dalkeith doing as well as suburbs such as Orelia and Calista.
"This suggests that those doing very well out of the current economy are grabbing the opportunity to upgrade and to buy into the premium suburbs, while prices at the other end of the market are being driven by first home buyers and investors keen to get into the market at more affordable levels," Mr Rossen said.Units surge in price
Mr Rossen said an interesting outcome from the June quarter was the strong growth in units and apartments.
"The price of units and apartments jumped by 14.3 per cent in the quarter, indicating that affordability might be driving more people towards multi-residential dwellings as they downsize their aspirations and mortgages.
"We have seen particularly strong growth in the year to June for units in Rivervale (68.4%), Inglewood (49.7), Hamilton Hill (45.3), Leederville (41%) and Orelia (38.9%), among others, "Mr Rossen said.
The average price for a unit in Perth is now $320,000, up 33.3 per cent in the year to June. Land prices jump
Mr Rossen said the strongest growth in prices in the year to June had been with blocks of residential land.
"The median price for a block of land is now $215,000, up very strongly by 48.3 per cent over the previous year, illustrating the strong desire for people to build and also the strong investor interest in recent land releases," Mr Rossen said.Rental
The REIWA data shows that the tight rental situation has eased a little, dropping back to a 1.8 per cent vacancy rate from 1.4 in the previous quarter.
"This accords with the anecdotal evidence we are getting from our member agents, which suggests that the rental market has relaxed a bit and people can now find it easier to find a place to live," Mr Rossen said.
Notwithstanding the increase in rental properties, the median rent for metropolitan Perth has jumped 23 per cent over the year to June, lifting the new median to $240 per week.Statewide
Mr Rossen said that the median price for a home throughout all of Western Australia is now $378,000, having grown by 36 per cent over the year to June and by 8.6 in the quarter.
"The resources boom continues to impact on the property market in a range of ways, including strong growth in some regional areas such as Carnarvon, Karratha and Port Hedland which have experienced solid, high, double digit growth rates.
"While in the state's South-west, Bunbury, Esperance, Albany and Bridgetown have all had an exceptional year to June, with growth rates of between 39 and 46 per cent," Mr Rossen said.Overall picture
Mr Rossen said that price signals were clearly starting to flow into the market as the number of first home buyers declines.
"However, Western Australia's economic fundamentals are still drawing strong population growth which will maintain housing demand in the face of limited supply," Mr Rossen said.Article added by: Communicationshttp://www.reiwa.com...iew.cfm?Id=7501