WA Perth market 2020

It seems every week the "Properties available for rent" figure keeps falling.

 

More good news for stock absorption.

For reference the 20 year averages are:

Houses: 1484 per month
Units: 362 per month

So we are well below the 20 year averages.

The fact that unit development is so poor is indicative of the fact that outside of a few blue ribbon areas units remain commercially unviable in no small part due to the fact that investors are still, for now, MIA.

There is a PHD thesis in there for an enterprising young student on just how badly property investors and developers misjudged demand. WA, literally, had a construction boom to house a bunch of people that never showed up.

 

Is the % difference in current unit approval to the 20 year average significantly greater than for houses?

Rough visual seems relatively similar percentage decrease though it could be my bad visual estimate of the data points.

Houses % decrease = [Current housing / 20 year average - 1] = 900 / 1484 - 1 = 39%
Unit % decrease = [Current units / 20 year average - 1] = 200 / 362 - 1 = 44%

 

You’re right. The graph posted makes it look like the falls in house was greater but, in fact, the bust in apartments was comparable.

Worth bearing in mind that Perth, traditionally, has built far less multi res as a share of total approvals than the major capital cities.

 

Numpties with easy access to money?
I see it in developments around me. Build what everyone else does or what they think will make the most money. Then watch them struggle to sell. Just a lack of market research imho

 

For sure. But this is macro:a massive housing glut borne from the actions and investments of thousands of people. A massive group think centered around a shonky premise.

 

Good example of cognitive dissonance imho

 

I wonder what total value wiped from the WA property market would be over the past 5 years. It would have to be something in the order of $100B.

I doubt the sugar hit from the 2013 - 2016 building boom was really worth it.

 

Depends on your perspective. Alot of people made hay while the sun shone - construction trades, builders, real estate agents, mortgage brokers, etc.

Those left carrying the can, well, that's another story.

 

It wasn’t worth it.

It was a pretty significant misallocation of capital.

The main risk now is that when demand does increase again-probably this year- the supply side will not be ready to respond as required.

That’s a key question for me, how much damage has been done to the WA construction industry as a result of four years of empty, or close to empty, order books.

Maybe there is nothing to worry about. Lets see.

 

Well a number of builders went bust, I imagine a significant number of subbies went bust too. When each builder went bust their creditors went down with them quite often - cabinetmakers not paid for $75k worth of cabinetry is hard to recover from. Some moved over East to follow the work.
There is likely to be a trade shortage if numbers pick up but it shouldn't be too bad if we have interstate trades who come back to do some of the work. The writing is already on the wall that we don't have enough apprentices coming through.

 

reiwa.com.au

Perth market snapshot for the week ending 12 January 2020

13 January 2020

Sales activity increased in Perth this week, with REIWA members reporting 542 transactions.

This increase can be attributed to significant rise in all house, unit, and vacant land sales over the week, rebounding back closer to normal levels after the seasonal influence of Christmas and New Year festivities.

Properties for sale
There were 12,433 properties for sale in Perth at the end of this week, which is one per cent more than last week.

A closer look at listing stock levels shows house listings increased by one per cent, listings for units and vacant increased by two per cent.

This week's total figure is nine per cent lower than levels seen four weeks ago and are 24 per cent lower than levels seen a year ago.

Perth rental market
REIWA members reported there were 6,225 properties for rent in Perth at the end of this week, which is eight per cent more than last week.

This week's rental listings figure is four per cent higher than levels seen four weeks ago, but are 16 per cent lower than levels seen a year ago.

Leasing activity also increased significantly in Perth this week, with REIWA members reporting 1,091 properties leased.

Despite notable increases in leasing activity numbers, this week’s figures remain eight per cent lower than the same week last year.

View our Perth Market Snapshot graph for a detailed breakdown of the past week.

 

I have done quite a bit of electrical work in these houses and I agree not and area you want to invest in

 

From SQM's weekly newsletter - Perth's rental market currently tighter than Sydney & Brisbane, equal with Melbourne. Sure it's just one month's data, but how things have changed in a few years.

 

Whats also interesting about the data is how flat rents have been during the last decade everywhere.

Even in markets with far less stock than Perth's.

SQM Research - Property - Weekly Rents - National

 

reiwa.com.au

Perth's top selling suburbs in 2019 revealed
NEW
14 January 2020


According to the latest reiwa.com data, Perth’s top selling suburbs for 2019 was led by Lakelands which saw a 36 per cent increase in sales activity and Wembley which was the quickest suburb to sell, taking 39 days on average to secure a sale.

Top suburbs by average days to sell
SUBURB AVERAGE DAYS TO SELL
1. Wembley 39
2. Heathridge 41
3. West Leederville 43
4. Carine 44
5. White Gum Valley 45
6. Nedlands 45
7. Kingsley 46
8. Woodvale 46
9. Shenton Park 47
10. Mount Claremont 49
Overall Perth market 84

Can you read anything into quickest suburb to sell?
It's not like these areas saw big price gains in 2019? Could it just be agents are underpricing in these areas to secure volume?

 

I think the article and some statistics are pretty meaningless. Number of sales doesn't really tally to increase in values. It may just mean that there are a lot of people that need to jump ship

Average days to sell is meaningful to me though as it means demand is there which could indicate undersupply in those locations and/or realistically pricing.

 

Perth properties selling quicker in December 2019 quarter

reiwa.com.au

NEW
16 January 2020

December 2019 data has revealed that properties are selling 16 days quicker than they were in the September quarter, taking only 67 days on average to sell, making it the fastest time to sell since December 2017.

REIWA President Damian Collins said while market conditions were challenging in 2019, the improvements in the quarter were a good sign entering into the New Year.

“Not only did it take only 67 days on average to sell in the December quarter, but the discount sellers are accepting from the original sale price has reduced to 6.8 per cent from 7.5 per cent in the September quarter.

“If this trend continues into 2020, we can expect median prices will begin to increase,” Mr Collins said.

Median house and unit price
reiwa.com data shows Perth’s median house price decreased slightly by 1.4 per cent during the December quarter to $478,000.

“The Perth unit median was also slightly lower at $375,000, however, we have seen an improvement in the vacant land median, which has risen 2.1 per cent to $245,000 since the December 2018 quarter,” Mr Collins said.

Despite this reduction, reiwa.com analysis shows there were 113 suburbs in Perth that experienced a stable or increased median price during the December 2019 quarter.

“The suburb to record the biggest improvement in median house price was Stirling with a seven per cent increase. This was closely followed by Safety Bay, Spearwood, Floreat and Scarborough,” Mr Collins said.

Sales activity
There were 7,418 properties sold during the December quarter, which is eight per cent lower than the previous year.

Mr Collins said this figure was below the September quarter sales figure, which wasn’t unusual given activity tended to slow in the lead up to Christmas.

“reiwa.com data shows there were fewer sales recorded in all price ranges during the quarter, which is consistent with trends typically observed at this time of year.

“Despite overall activity declining, there were a few suburbs that recorded an improvement in sales activity during the December quarter. The top five performing suburbs were Maylands, Belmont, Spearwood, Golden Bay and Wembley,” Mr Collins said.

Listings for sale
There were 12,410 properties for sale in Perth at the end of December.

Mr Collins said the December quarter listing figure was down seven per cent on the September quarter and 23 per cent down compared to the December 2018 quarter.

“There are a number of reasons that have contributed to the decrease in listing stock. Firstly, this is a common seasonal trend we observe, with reiwa.com data showing listings for sale usually lower in December than September,” Mr Collins said.

“Secondly, reiwa.com analysis shows that good, quality stock is being snapped up fairly quickly, which is shown from both the improvements to average days to sell and the discount sellers are accepting - ultimately this means stock is being absorbed at a quicker rate.

“While we don’t expect to see rapid growth in the Perth property market in 2020, REIWA’s outlook suggests sales volumes could start to increase this year. With house prices in Perth remaining relatively affordable and consumer confidence levels on the incline, this could translate into increased activity throughout the year."

 

Agreed high number of sales I see as a bit of a turn off in the regards to scarcity of the asset, you could obviously drill down further in the data to find markets within markets but at general face value not a fan.

Also in the Case of the article with Lakelands leading the way for volumes of sales that would be attributed to the massive amounts of house and land being sold off.