The fall in the number of properties on the market, along with an increase in land sales, are the main themes to emerge from the June quarter data.
Despite the increase in the number of sales, the falling number of properties on the market is not being replenished by sellers listing new stock.
REIWA’s figures for the months of April, May and June show that turnover is up by 25 per cent when compared to the same period in 2011, with a projected 11,700 sales taking place in the quarter.
The metropolitan median price is holding steady at $475,000, but the number of properties on the market dropped to just 12,150 at the end of June and currently sits at around 11,000.
This is well below the 14,300 properties we had on the market in March and sits below the equilibrium of around 12,000 listings, suggesting the market is swinging back to favour sellers.
It is surprising that the estimate of statewide dwelling sales has only risen 1 per cent for the June quarter, due to mixed results between Perth and regional WA.
In Perth, both house and unit sales are up around 5 per cent for the quarter but this has been moderated by softer regional activity during this period, with house sales down an estimated 12 per cent and the small, multiresidential market down by 15 per cent.
In annual terms, house sales in Perth are up by 15 per cent in 2011-12 when compared to 2010-11, but still remain some 15 per cent below the 15 year average. Similarly, multi-residential sales are up 5 per cent for the year but still 30 per cent below the long term average due to weak investor activity.
However, in further signs of market improvement the number of sellers dropping their asking price to get a sale has fallen by 13 per cent on June last year, with 61 per cent of sellers prepared to reduce the price. Where this happens, the average reduction is 6.3 per cent.
Buyers now have much more confidence to enter the market and with low interest rates, a growing population and positive growth over the last six months, they are more inclined to make the move they have been holding off from over the last two years.
The number of selling days has also come down by almost a week, dropping by six days to an average of 73 days on market.
The median price for group dwellings such as flats, apartments and villas, is also steady and showing a modest drop of just under $5,000 in the quarter to $402,500.
The reverse situation is happening with land prices, up by $5,000 in the quarter to a median price of $250,000.
Our preliminary data is showing a 25 per cent lift in land sales, suggesting that prospective home builders are getting ready for their new home.
Suburbs such as Baldivis, Butler and Byford on the outer edges of the metropolitan area saw the greatest number of land sales in the year to June quarter.
In the Perth rental market, things have hardly moved so far as the vacancy rate goes, resting below average, at 1.9 per cent and putting pressure on prices. The median rent has grown by a further $10 to $430 per week, representing an increase of just over 13 per cent on 12 months ago.
This breaks down to a median of $440 per week for houses and $410 per week for units and apartments.
In regional markets outside of the capital, the median house price fell by $15,000 during the quarter to $360,000, while the median price for units and apartments fell by around $10,000 to $324,500. Country land saw a modest rise of $3,000 to a median of $168,000.
There was a fall in regional house sales, due largely to weaker activity in Mandurah-Murray, Bunbury and Geraldton, while turnover picked up in Kalgoorlie-Boulder.
It’s a steady-as-she-goes market.
The volatility has gone, buyers are more confident and prices are stable. But if we don’t see the sold stock being replaced with new listings it may put price pressure on the limited stock that remains or increase demands on the building industry.
Image by Ole Reidar Johansen via Flickr.