WA Perth Market 2016

{Note from mods - this thread continued from here: WA - Perth Market}

 

Australian house just prices recorded their largest quarterly fall since 2011

Perth up over 2% for the month. A sign of recovery or has it been artificially increased with the sale of a number of larger properties?

 

I'd say it's just December figures being as unreliable as ever, basically nothing happens for half the month so much less reliable statistics, just takes a couple of extra high price properties to move the needle.

 

Stock is down by over 1000 and prices have risen but has this been case for the month of December in previous years or the start of a recovery?

All reports i have read in the past week it seems the market is still declining but they may be using old data or just rehashing what other journalists are saying. To quote (as i recall) from one report was "the bottom is no where near in sight"
WA real estate market - Perth property & house prices - reiwa.com

 

Think the seasonal stats say it all on that link. Nearly 3,000 more listings and yet there are 44 less sales than last year.

None of those graphs look very good either.

I'm interested to see the next unemployment stats, those are what would drive any sudden movements downward. (I can't see a miracle rate increase anytime soon).

 

One of the country's biggest private developers, Nigel Satterley, has warned that the Perth property market faces two years of "recession-like" conditions.
Two more years of Perth property pain: Satterley

 

Prestige property leads house price falls

Perth was the surprise package recovering 2.3 per cent.

"It's only a month, we won't see consistent rises in Perth. Values there are still down over the quarter and year to date. I expect to see the 2.3 per cent increase get clawed back over the next quarter,"

"The reason for the price rise is partly volatility. The large rise is a month to month movement but the expected trend is still down over the quarter but it's not falling over the cliff."

The rise in December prices for Perth was mainly in detached housing rather than apartments which was still suffering from falling yields.

 

I'm looking forward to more bonuses and incentives at Satterley estates They are already doing $8-10k additional incentives on many lots.

I recall free cars and other such lovely bonuses only 4 or so years ago.

 

Currently 17,000 listings on market, balanced market is 12,000, so we currently have oversupply and increasing.

 

Couple if articles on the paper recently if anyone is interested

General positive article on the major projects in the city, good for out of towners to see what's happening, seems positive to me
Perth will transform by 2021 as plans blossom

Another one about the numbers in WA
2015: An economic retrospective

Wow where do I sign!

 

Interesting read that first article, I wouldn't have said it was positive though, it's basically outlined all the projects that are already underway, aka a bit late to pull the plug on, and pretty much zero that haven't already started (which is the concern, what picks up the slack when those projects finish and there is no public money to throw around). (Note I mean positive as its relation to the economy rather than the actual outlook of the article which is obviously positive!)

Even more concerning is it mentions one group that have already walked away from a project and another that are quite likely to walk away.

Then you have the numbers article... which is almost exclusively negative!

The positive is Perth needs a bit of doom and gloom to help form/build other industries. The tourism industry is one that will thrive in bad times as affordability is one of biggest negatives as a tourism attraction, a recession would help correct that to a large degree.

 

I haven't followed closely but the aud is dropping which boosts tourism. The city projects will be good timing for more visitors. But as you said there needs to be moremajor works starting.

It's there any potential in the holiday /Airbnb market around Perth? Will they a viable option over the bread and butter housing?

 

I think the problem is that Perth itself has very little in the way of tourist attractions. The majority of tourists stay for a day or two to check out Rotto and the beaches and then they get out to the real attractions, be it south or north and those areas have got well established short stay accommodation markets already.

AirBnB is probably viable but would take a lot of work to manage.

AUD falling certainly helps, it starts to make the excessive cost of food/drinks/accommodation in Perth start to be a little more reasonable but the reality is as long as they cost what they do and getting here costs what it does the majority of foreign visitors will continue to give Perth a wide berth. Which is another reason why a couple of years of "bust" would be good in the long run for Perth's economy, we're much better off people coming here because it's affordable than because they can make a lot of money to go elsewhere with which has been the reason to come here over the past decade or so.

 

what price did it go for?


edit: saw it on the site, $610,000

OK price for something with DA approval of 8 units.
depends on the details of the plans though.

 

Perth's property median hits $540,000

The local property market is beginning to show signs of stability as the rental market gains strength, according to the latest Real Estate Institute of Western Australia figures.
Reiwa data showed the median house price in Perth increased to $540,000 for the three months to December, up 0.9 per cent from November's median of $535,000 and is about $30,000 higher than what CoreLogic RP Data valued yesterday.
Reiwa president Hayden Groves said the increase in the median house price, along with a fall in the number of properties for sale, was indication of a market that was beginning to steady.
“The total number of listings as at December 31 was 14,539, an adjustment from the November figure of 16,475, which is mostly attributable to the effect the holiday season has on seller behaviour,” Mr Groves said.
“Whilst it’s not uncommon for sellers to withdraw their properties from sale during the festive season, we’re also seeing the impact that the removal of the first home owner grant is having on sales volumes.
“The test will be to see how many properties come to market by the end of January.”
Mr Groves also said the latest data showed there was higher demand in the trade-up sector of the market with properties priced between $500,000 and $600,000 and with four bedrooms taking 47 days to sell; significantly less than the market average of 60 days.
“Fewer than 50 per cent of sellers are discounting in this price range, further demonstrating the demand in the trade up market,” he said.
“In contrast, between 50 to 70 per cent of sellers are discounting their properties in the first home buyer’s price bracket which again highlights the softening in demand since the removal of the first home owner grant for established homes.”
Meanwhile, the local rental market has stabilised according to the Reiwa data, with the overall median rent increasing by $5 to $400 in December.
“The rental market has also showed signs it is stabilising with weekly rents increasing across the board and listings at levels consistent with the month prior,” Mr Groves said.
The median house rent is now $410, an increase of 2.5 per cent, or $10, while the weekly median unit rent has increased 1.3 per cent, or $5, to $380.
Rental listings in the Perth metro area have increased 15 per cent over the last three months to 9,533 as at the end of December.

 

Interesting to see REIWA come out with a figure $30k higher than Corelogic RP Data, I know which one's figures I'd trust more given their respective positions but it still seems odd.

Would love to know how they're getting such a significant difference!

 

They measure the data differently. No one method is correct but as long as they keep everything consistent then you can compare trends reliably.

Unadjusted Median
• REIWA

Mix-Adjusted/Compositional Change
• ABS
• APM – Price Composition Adjusted

Regression-based Techniques
• Residex – Repeat Sales Method
• Rismark – Hedonic Approach (RP Data)

 

Unadjusted Median
• Simple & Straightforward
• Utilises official Landgate data or member based sales evidence
• Measures median sales price of the market
• Subject to revision & compositional error
• Can be distorted by types of houses sold
• May under/over-state overall price movement
• Overall median masks geographic differences
• Effected by seasonal selling patterns

 

Building approvals down significantly again in November. Not good for unemployment I wouldn't think.

Building approvals come off the boil

 

Definitely not a sign of recovery. I am going to home opens and there are few or no people there. Certainly no interest at the list prices. I went to an auction of 30 houses last month. Maybe 4 sold.