THE Perth property market wrapped up 2017 on a positive note, with December quarter data topping the previous quarter.
“Traditionally, the September quarter outperforms the December quarter, but that wasn’t the case in 2017,” REIWA president Hayden Groves said.
“The December quarter is on track to record 14 per cent more sales than the September quarter.”
Speaking at the Australian Property Institute 2018 Residential Property Outlook breakfast today , Mr Groves said the September quarter sales figures were the lowest going back 27 years.
“2017 is likely to have fewer sales than 2016 due to the pitiful September quarter,” he said.
Mr Groves said it bode well for Perth that key indicators including median prices, sales activity, listing levels and average selling days had improved over the quarter.
“We now appear to be entering a recovery phase, though REIWA remains cautious about expectations of rapid growth in the next 12 months,” he said.
However market improvement was not across the board.
“In the December quarter, there were increased sales in the $700,000 to $800,000 price bracket, which has seen the median increase, while first-home buyers have gone quiet in the $350,000 to $400,000 bracket,” Mr Groves said.
“It is too early to say if this trend will continue in the March quarter but buyers are actively looking for trade-up property right now while the lower end is still oversupplied.
“In that way we have a two-speed market in Perth at the moment – trade-up activity going nicely and the lower end starting to struggle a bit.”
Median house and unit price
Perth’s preliminary median house price increased 1.2 per cent to $516,000 in the December quarter 2017.
“Once all sales have settled, we expect the final December quarter median to lift to $520,000, which is a notable improvement on the September quarter median of $510,000,” Mr Groves said.
“On an annual basis, the Perth market is very stable – we’ve observed consistent price levels between the December 2016 and 2017 quarters which is a strong signifier the market has turned a corner.
Perth’s median unit price is $405,000 for the December 2017 quarter which is a 1.3 per cent increase on the September quarter.
“It’s encouraging to see Perth’s house and unit medians increase over the quarter because it suggests one sector hasn’t recovered at the expense of the other,” Mr Groves said.
There were 4946 dwelling sales in Perth in the December quarter.
Mr Groves said this figure was expected to lift to 6700 once all sales had settled, putting it significantly above the September quarter sales figure.
The composition of sales also shifted in the December quarter in Perth, with more transactions occurring above $700,000.
“We’ve observed a surge of activity in Perth’s aspirational suburbs, with buyers recognising there is good opportunity to secure a home in these areas which might have previously been considered unattainable by many,” Mr Groves said.
Listings for sale
With 13,088 properties for sale in Perth at the end of the December quarter, Mr Groves said this was on par with the September quarter figure and 6 per cent less than the December 2016 quarter figure.
“There were 800 fewer listings in Perth at the end of 2017 than there was in 2016 and some 1300 less than there were at the same time 2015,” he said.
“We have consistently seen stock levels decline over the last two years as the market trends towards parity.
“Declining listing levels combined with notable improvements in sales activity has helped restore net-demand.
“With buyer activity increasing, stock levels are being absorbed faster.
“Over the year I imagine that we’ll see the $700,000-and-above bracket stock tighten, but as it’s still feeding through at the lower end, stock levels will remain around the 13,000 mark.”
REIWA figures showed 1.3 per cent of the total housing stock in the Perth metro was on the market, with an undersupply in Duncraig, Nedlands and Floreat.
There was oversupply in Alkimos and Cockburn Central.
Average selling days
It was 10 days faster to sell in the December quarter than it was in the September quarter, with it taking on average 60 days to secure a sale.
“It’s been two years since it was this quick to sell in Perth,” Mr Groves said.
“The combination of sellers’ preparedness to meet the market and buyer appetite for well-priced property has significantly shortened days-on-market.”