Perth Monthly Market Wrap
Written by: Brett White
The review for December is finally here and the results has really been interesting.
According to the Herron Todd White Residential Report, “Perth’s housing market overall remained relatively stable, but also fluctuated significantly by sub-region. Even pairs of neighbouring suburbs across Perth have seen growth rates that vary, proving that small differences in aspects such as location, amenity and new infill development supply can have a big impact on overall performance.”
The construction activity has started to bloom and the multi-billion South Flank iron ore project is a big progress. Aside from that the said report also mentioned, “The Morrison government’s GST reform has recently passed the Senate. Western Australia will benefit from an extra $4.7 billion over an eight year period which is likely to be used to commence paying off state debt incurred from the last mining boom and the infrastructure requirements that imposed on the state within a relatively brief period of time. We addressed the GST issue in our February edition and it’s some comfort that we are ending the year with somewhat of a solution in place – although we could argue that the solution remains unjust. At a GST floor of 70 cents to the dollar, Western Australia is still sitting well below New South Wales’ takings of 86 cents this year, but this is nevertheless a significant boost to our annual takings. There are promising signs for our economy to improve as net migration figures and consumer sentiment appear to be set to rise.” It is also to be noted that performance across the regions of greater Perth vary. There was a decline of 1% on Perth’s median house price for September 2018 quarter. Eventually, these will even out once all sales have settled.
Perth’s rental scope did a fairly strong performance last year since most market indicators produced positive outcomes. Coming from Damian Collins, “leasing activity was up, median rents remained stable, stock levels had reduced, average leasing times were quicker and the vacancy rate had plummeted to its lowest level in more than four years.” The longest period of stability in Perth’s rental sphere was experienced in 6 straight quarters with a median of $350 per week.
From REIWA’s statistics, “Rental listings have also dropped significantly. At the end of the September 2018 quarter there were 7,286 properties for rent in Perth showing a decrease in stock levels of 11.9 per cent from the previous quarter and a 25.1 per cent decrease since the September quarter 2017. As the commencement of new dwellings is slowing, stock is being absorbed faster, decreasing the number of listings. On top of this, Perth’s vacancy rate declined to 3.9 per cent in the September 2018 quarter. The vacancy rate has now dropped below the ten-year average and is at the lowest level we have seen since the March 2014 quarter. Leasing activity has increased 5.2 per cent since the June 2018 quarter, as 13,234 properties were leased.”
Positive market indicators are good signs for investors and an encouraging indication that the market is in progress.