Perth Housing Growth Slowed In June, But Savvy Buyers Still In The Market
Perth’s runaway housing market slowed in June, despite home values increasing by almost 2% across the country.
CoreLogic’s Hedonic Home Value Index, released on Thursday, showed national property values increased by 1.9% in June, taking annual growth to 13.5% for the financial year.
“This is the highest annual rate of growth seen across the Australian residential property market since April 2004, when the early 2000’s housing boom was winding down after a period of exceptional growth,” said CoreLogic Head of Research for Australia Eliza Owen.
“However, there are some markets where performance is starting to ease more notably.”
Across the capital cities, the loss of momentum was most evident in Perth where the growth rate averaged 1.4% between January and May, but fell to 0.2% in June. This translated to a 2.1% rise in prices for the quarter and growth of 9.8% in the past year for Perth.
Ms Owen said strong demand spurred by low mortgage rates and high consumer confidence had underpinned growth prior to the recent COVID-19 uncertainty. Elevated savings accumulated through COVID-restrictions last year had encouraged spending on housing.
But she said it was difficult to predict whether this dynamic could be maintained in coming weeks amid recent lockdown conditions in several parts of Australia.
Mont Managing Director Matthew Podesta said it was not surprising that Perth’s growth had petered in June with the onset of winter, but he did not expect the lull to be ongoing.
“We were sensing and seeing a slowdown of the Perth market in June,” Mr Podesta said. “Traditionally, there is a bit of a slowing of the market in winter but coming off the back of such a rampant run, it has been more noticeable.”
Nevertheless, he said there were still active buyers in the market, with premium suburbs still leading the charge.
“There are still astute buyers out there looking to get into the market, however their level of caution is a little bit more obvious than it has been previously.”
“At the same time, there are buyers in the market who are happy to wait and watch. It’s a major shift from a couple of months ago when they did not hesitate or take second chances.”
“Whenever there is A-grade, desirable stock, opportunistic buyers will still come out and grab it. That fundamental hasn’t changed change. People are snapping up quality homes while they can. Family homes on big blocks in blue chip areas aren’t lasting and it is very clear people want that extra space.”
“For those sitting on the fence thinking growth will continue all year, the data suggests that now may be a good time to bring your home on the market while it’s still tight in the event that it softens further. Whilst we’re still in a seller’s market, that sentiment is shifting slightly.”
Mr Podesta said the CoreLogic report also highlighted the strength in Perth’s rental market, which recorded the second highest increase in annual rental growth at 16.7%, second only to Darwin, where rents increased 21.8% across the market.
“Mont still remains with surplus tenant inquiries to properties available and we are not seeing any softening in that space yet,” he said.
REIWA President Damian Collins said while the Perth’s home values had only increased by 0.2% in June, the cumulative growth over the first six months of the year had been substantial.
“Although the June price growth rate is the smallest we have experienced this year, it has still been a positive year and brings the year-to-date total growth tally to 7%. Furthermore, in the last financial year, home values have increased almost 11% in Perth.
“The smaller growth rate recorded in June is also not surprising given we have entered the traditional winter slowdown. In fact, it’s encouraging that even as the colder weather has descended upon us and activity has eased slightly, we are still seeing price growth. This will hold Perth in good stead as we transition out of winter and into the spring selling season in the coming months.”