Median house price increases

By REIWA President Damian Collins

Greater activity in higher price brackets saw Perth’s median house price increase in November. It rose 1.6% to $518,000 according to data.

REIWA president Damian Collins said this was the second month in a row Perth’s median house price had shown improvement.

“(The) median house price has been fairly flat throughout 2018, so it’s pleasing to see two consecutive months of median price growth as we head into the new-year,” he said.

“ analysis shows there was a shift in the composition of sales in November, with a greater proportion of transactions occurring above $1million than there were in October.

“This has contributed to the increase we’ve seen in Perth’s median house price this month.”

The top selling suburbs were Willetton, Baldivis, Canning Vale, Duncraig and Ellenbrook, while Quinns Rock, Willetton, Doubleview, Leeming and Wellard had the biggest percentage growth in sales volumes.

“While overall sales activity in the Perth metro region remains subdued, numerous suburbs bucked this trend during November to record notable improvements in sales,” Mr Collins said.

Listings for sale were 5% higher at the end of November than at the end of October and Mr Collins said it was not unusual to see increases in listing stock at this time of the year.

“Sellers are returning to the market following the lull of the winter period and wanting to get in quick before the holiday season ramps up,” he said “With listing stock rising, buyers have a good supply of choice available to them, making it a very good time to buy.”

Perth’s overall median rent price remained steady at $350 per week in November, but there was a $5 increase in the median unit rent price.

“While the overall median and median house rent ($360 per week) were stable, pleasingly the median unit rent did increase to $330 per week,” Mr Collins said.

“Additionally, when we compare the November 2018 median unit rent to three months ago (August 2018), data shows the unit rent has increased by $10 per week.”

The five suburbs that experienced the biggest percentage increase in leasing activity during November were Kardinya, Coolbellup, Bedford, Kelmscott and Harrisdale, while Perth, East Perth, Scarborough, South Perth and Baldivis had the most number of leased properties.

Listings for rent were stable in November, remaining below 7,000 and a significant 25% lower than the same time last year.



REIWA’s 2019 outlook indicates stable market and an improved rental sector

by Damian Collins – REIWA President

With the end of the year fast approaching, conversation is quickly turning to 2019. This is especially the case in real estate, with agents, buyers, sellers, tenants, investors and even casual observers wondering what’s in store for Western Australian real estate in the New Year.

REIWA recently released its outlook for 2019, which provides an overview of the market conditions expected during the forthcoming 12 months. The Perth property market has been fairly subdued during 2018 and REIWA expects to see stable or similar results next year, with the rental market shaping as a notable exception.

Weekly sales have hovered at around 500 per week in Perth throughout 2018, while listings for sale were largely unchanged from 2017 levels, fluctuating between 13,000 and 16,000. Listings should continue to trend at current levels throughout 2019.

While we expect sales activity in 2019 to largely reflect what we’ve seen this year, there is a possibility rising consumer confidence levels, coupled with improved housing affordability may translate into increased sales volumes in 2019. And if weekly sales remain at current levels or better, Perth’s median house price could improve during the next 12 months.

Tightening lending standards loom as a potential deterrent to any sales or median price improvement in 2019, as this could restrict the number of people who are able to purchase a property. Additionally, if the banks choose to increase interest rates again, this could adversely affect buying and lending conditions in WA.

REIWA analysis shows the upward trajectory of the Perth rental market should continue through 2019, with stable population growth and slowing new-building construction levels the key drivers for some marked improvement in this sector.

With population growth in WA expected to remain stable and new dwelling commencements slowing, Perth’s available rental stock should continue to decline. This should see competition amongst tenants increase, putting further downward pressure on the vacancy rate, which now sits at 3.3%.

Remarkably, Perth’s overall median rent price has held at $350 per week since April 2017 – the longest period of stable rents Perth has experienced since REIWA first started recording rental data in 2001. If listings continue to decline and leasing volumes remain healthy, we should see the overall median rent price increase in 2019 for the first time since September 2014 – which will be a nice change of pace for landlords.

Pleasingly, the WA market appears to be stabilising and moving towards a recovery, however REIWA remains cautious about expectations of rapid growth during the next 12 months.

Market sentiment builds as recovery imminent


by Nick Allingame UDIA WA President

The downturn in Western Australia’s property market has been more protracted than many of us expected. However, positive market sentiment is certainly gaining momentum.

Premier Mark McGowan was recently quoted in the media advising people in WA to ‘buy a house now because the good times are coming back’.

Those ‘good times’ Mr McGowan referenced pointed to data reflecting an 1.1% expansion in the domestic economy in 2017-18 after four years of decline, along with the GST reform package that will provide a much needed boost to WA’s economy.

Good news is also emerging from the mining sector, particularly as lithium production in WA expands exponentially.

Opposition leader Mike Nahan was similarly upbeat in his speech at last week’s UDIA Industry Luncheon on achieving growth in WA. Mr Nahan said he had ‘great faith in the future growth of Western Australia for a variety of reasons, beginning with the resource sector’. He noted the resurgence in gold, iron ore, nickel and lithium production and said the sector was already starting to experience a shortage of workers.

Further reinforcing this positive outlook, Bankwest Senior Economist Alan Langford said he was ‘quietly confident’ there would be a flow-on benefit to WA’s property market thanks to the growth in the mining sector, potentially in six to nine months.

This boost in mining will attract people to the state, which in turn will result in increased demand for land and housing.

The UDIA is confident that a recovery is imminent given our recent analysis of Landgate settlement data which shows positive activity in the top and middle sectors of the market. Our research indicates that premium housing areas in Perth such as Mosman Park and Cottesloe have started to perform well, with strong housing demand and limited supply driving price increases.

In fact sales of properties prices $1 million and above in the central metropolitan region have recorded positive annual growth for both the March and June 2018 quarters.

In the central region there was 4.7% annual growth in the number of sales above $1 million during both quarters.

Turning to areas such as Belmont, Victoria Park, Canning, Fremantle, East Fremantle and Bayswater, indicators point to investors taking up small scale development opportunities in anticipation of the market lifting.

For example, Fremantle settlements for lot sizes between 751sqm and 2000sqm have had three consecutive quarters of solid growth, with a significant 31.3% increase in the June 2018 quarter.

Given all of this evidence, I am confident that WA is on a positive path heading into 2019.