House sales activity in Perth’s first home buyer market showed no signs of slowing down in the September quarter 2016, with half of all transactions over the three month period occurring in the lower end of the market.
REIWA President Hayden Groves said early Landgate data showed that house sales activity in the $500,000 and below price range had lifted by 12 per cent on the June quarter 2016.
“First home buyers recognise that now is a great time to buy in Perth and are taking advantage of more affordable prices and lower interest rates to secure their first property,” Mr Groves said.
According to the latest ABS housing finance data, first home buyer loan activity remains at consistent levels, with first home buyers making up around 20 per cent of total loans financed for the three months to August 2016.
“From December quarter 2015, various affordability measures have shown that housing affordability is improving in Perth. The June quarter REIA home loan affordability indicator, which measures the proportion of income required to service a loan improved, and the housing component of CPI eased,” Mr Groves said.
Perth median house and unit price
The increase in the volume of house sales below $500,000 did put some downward pressure on the median house price in the September quarter, with the preliminary median coming in at $509,000 for the three months to September.
“With more activity occurring in the lower end of the market, this has contributed to the softening of the median house price. Once all sales have settled, we expect the revised quarterly figure to lift to around $520,000,” Mr Groves said.
However, the opposite trend was observed in the unit market, with an eight per cent increase in activity in the price range above $450,000 recorded in the three months to September.
“This lift in activity in that price bracket has had an influence on the preliminary median unit price which increased to $427,000 in the September quarter from $408,250 in the June quarter,” Mr Groves said.
Overall sales activity
While activity in the first home buyer bracket increased during the quarter, overall preliminary dwelling sales volumes for the state came in at 5,630 for the three months to September.
“This figure is expected to lift to around 8,400 in the coming months once all sales have settled, which will put volumes slightly lower than last quarter by around six per cent,” Mr Groves said.
Listings for sale
Listing stock in Perth was steady in the September quarter, with the total number of properties listed for sale sitting just above 14,000.
“While this remains above the long term average, it’s pleasing that the usual surge of spring listings has failed to materialise keeping listing levels more-or-less commensurate with demand,” Mr Groves said.
Selling days and discounting
The number of Perth sellers needing to reduce their asking price in order to sell dipped in the September quarter by around three per cent.
Mr Groves said this showed that sellers were listening to the advice of their real estate agents and pricing their property correctly from the start.
Despite the improvement in discounting, the average number of days it took to sell in Perth increased by three days over the quarter to 68 days.
Perth rental market
Perth’s rental market continued to favour tenants in the September quarter, with the overall median rent etching back slightly to $373 per week, from the revised June quarter median rent of $380.
“Thankfully, rental listings have dropped back 2.8 per cent this quarter, coming in at 10,709 from 11,017 in the June quarter,” Mr Groves said.
The average time to lease a property in Perth increased by three days, and the vacancy rate lifted to 6.6 per cent in the September quarter, however leasing activity in Perth remains positive, with a 12 per cent lift recorded over the quarter.
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