Perth Spring Season Blooms As COVID Lockdowns Impact East Coast
Perth’s spring selling season is all systems go as the city’s isolation provides some immunity to coronavirus outbreaks impacting property markets on Australia’s east coast.
As lockdowns continue in New South Wales, Victoria and the ACT, Perth is experiencing a more traditional peak selling season as house prices surge to lofty heights amid record low interest rates, strong demand and persistently low levels of stock on the market.
Mont Property Managing Director Matthew Podesta said the Perth property market continued to see remarkable strength, but there was now an air of restraint amongst some buyers.
“There is an overwhelming sense that people are super-enthusiastic to get into the market. This is playing out in incredible competition for quality properties and some astronomical sales prices,” Mr Podesta said.
“However, there is a degree of caution creeping in. The broader FOMO (fear of missing out) factor that we had seen in the market has softened a touch.”
Data released by the Australian Bureau of Statistics in its Residential Property Price Index last week shows property values in Perth surged by 15% in the past 12 months to June.
This compares to the weighted average of Australia’s eight capital cities, which increased 16.8% in the year to June. Sydney saw the greatest increase of 19.3% followed by Canberra with 19.1%.
The report’s House Price Index saw Perth house prices rise by 15.7% in year to June, while the growth across all dwellings was 12.1% for the 12-month period.
It comes as statistics compiled by the Real Estate Institute of WA shows there were 902 property sales in Perth in the week ending September 12, 2021 – compared to 785 sales for the same time last year.
The REIWA data shows the extent of the lack of supply for sale in Perth. In the week, there were 8509 properties listed for sale, compared to 10,664 for the same week last year – 20% fewer properties for sale.
The rental market painted a similar picture with 2324 properties available for rent during the week ending September 12 – 25% lower than the same week last year when 3097 dwellings were available.
Latest REIWA statistics show the median house price for metropolitan Perth now stands at $515,000 just $5000 shy of the five-year peak of $520,000 in December 2016.
And properties have been snapped up more quickly this year. The median number of days on market was at 18 for the June quarter, marginally up from 16 in the March quarter – well down from five years ago when the median selling days was at 51.
Mr Podesta warned that buyers keen to transact in the current market should not delay.
“Good properties will always sell and are being snapped up quickly at the moment,” he said.
“Anyone hoping to sit it out until prices soften will miss out. There are literally hundreds of people waiting to jump into the market, and the current heat means that genuine buyers should not hesitate.
“The general tightness in the market is keeping prices buoyant. Whether that continues is harder to read but there is certainly still an overwhelming appetite in the market.”
REIWA President Damian Collins said despite the winter season in Perth traditionally experiencing a lull, the median house sale price in many suburbs had continued to increase this year.
“After a wet winter, it’s impressive that so many Perth suburbs recorded median house sale price growth between June and August,” Mr Collins said.
He said REIWA data showed 104 more suburbs had recorded price growth this winter compared to last winter.
“The Perth property market has changed quite dramatically since winter 2020, which is reflected in the number of suburbs that saw price growth this year. The Perth property market is firmly in a recovery phase and many suburbs are feeling the benefits of this current growth cycle,” Mr Collins said.
“It will be interesting to observe how price growth across the Perth region fares over the coming months now that the spring selling season has kicked off. Given the current low supply and strong buyer demand, it looks like we will continue to see price growth.”
In early September, the Reserve Bank of Australia opted to keep the cash rate at 0.10% for the 10th consecutive month, amid COVID-19 outbreaks on the east coast and lockdowns.
RBA Governor Philip Lowe said while ongoing, the recovery in the Australian economy had been disrupted by the Delta outbreak and the associated restrictions on activity.
“Housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak,” Mr Lowe said.
“Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”
LOCAL GROWTH: 12 months to June 2021
Mount Pleasant: 5.93%
East Fremantle: 6.93%
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Source: Real Estate Institute of WA