Perth’s property prices continue to slump

Perth prices according to corelogic for oct were down -3.28% year on year for all housing. Not quite 12 months but looks like this mob might be smarter than u think.

With trade wars ongoing and starting to bite into global economy, especially china, its gonna be a rocky year ahead for mining and for western australia.

Maybe bhp should go and derail a few more trains to push the price up

 

Yep, just keeping up with inflation would be nice at this point.

 

Has Perth hit bottom yet??

I think fragmented markets, some desirable blue chip suburbs holding their own. Still price sensitive, however there is demand, the right product selling within one week.. However, its not rising yet.

Still way too many apartments which are not moving

What about other areas?? anyone care to comment on what they are seeing.

 

Well, from a whole of market perspective (for what that's worth) median prices are down a further 3.4% the last three months, and there is no sign of a bottoming out by the Corelogic daily indices, if anything the curve has steepened recently.

This is probably a result of very weak November & December market activity now flowing through into the data as transactions settle. Units are doing worse than houses, no doubt dragged down by the saturated apartment market.

I get the feeling there has been a bit of an uptick in interest in the new year (perhaps seasonal?) at least, with views of online listings for many suburbs increasing significantly. If this is translating into better sales activity, it won't start showing in the data until next month due to the settlement lag. Will be interesting to see if we at least start seeing some price stabilisation in the next couple of months.

This is now the longest and deepest decline for the Perth market in living memory, definitely worse than the "worst case" scenario most investors would reasonably have planned for. Hard to see many immediate drivers of market stabilisation or growth (outside of blue chip areas) with unemployment back near 7%, credit as tight as it is and many of those who could jump the serviceability hurdle not having spare equity to put toward upgrading or investment purchases. Hopefully the tight vacancy rate flows through to conspicuous rent increases this year, to nudge some First Home Buyers out into the market.

 

Thanks good post

Not too much good news here

 

On the upside, Perth property is cheaper than it's been for 15 years. You would think current prices are a once-in-a-generation buying opportunity, after all many are now 'fearful' of the Perth market. Surely jobs and population growth has to pick up over the next couple of years to get things moving again.

 

What are your thoughts on the northern coastal suburbs? My brother is looking for something in the Currambine/ocean reef/Iluka areas. Max budget is 600k cash. Hoping for prices to drop in these areas but unsure what the movements are because just started looking in December 2018.

There was a couple of good deals at the start of the year but they got snapped up straight away. Getting worried about uptrend or could be seasonal.

 

Seasonal.

Until there is a circuit breaker there will be more negative sentiment.

 

I can't imagine any rush to get into those areas. Ocean Reef is probably the better of the 3 if he is happy to go with something older but larger land component.
I don't think there will be much more of a price drop in the area but also not much growth hence me thinking he shouldn't rush in. Well priced deals will always sell quick, over priced stuff will linger and sometimes then turn into bargains.

 

Funny you say that - the #1 and #2 reasons I bought in Ocean Reef is that prices have been incredibly stable and the Marina is coming.

 

I agree. So I don't think there is any price drop to wait for his brother is what I was trying to say. I would rate it Ocean Reef, then Iluka then Currambine. Currambine has never floated my boat even with it's train station and high density blocks.

 

Currambine has some neat pockets but they are just pockets.

I like the blocks and the views in Ocean Reef. Boring as ******* suburb but it's quiet, close to literally everything and I have room for a pool.

 

The absence of FTBs isn’t the main issue as I see it.


They are the ones buying albeit in small overall numbers. Besides, much of that demand will be funnelled into new builds through the grants and because consumer preference in WA appears to be for more house further out than less house further in among FTBS.


Investors need to come back in and that’s why everything hinges on rent increases. For the thousands of investors ‘waiting for the market to recover’ their best hope is that, somehow, population growth increases putting more pressure on the rental market. That is the only thing that will get things moving.


Forget the property cycle, it’s the broader economic cycle. Without a broad based economic recovery (and the associated influx of people) the property market could well grind along for years doing nothing.


But is there any guarantee that the vacancy rate will fall to the extent that we see meaningful rental inflation? Why can’t it just stay at a balanced level delivering negligible 10 or 20 dollar a week rent increases per annum?


On the other hand, you could look at ‘Property clocks’ and take the view that its about time Perth boomed because there hasn’t been one in over a decade.


On a related matter, do townhouses and villas count as units in the corelogic and SQM methodology does anyone know?

 

Daz, I'm pretty sure townhouses fall under their unit category. But I still don't know what a villa is

 

Took me awhile to comprehend that FTB was a FHB? First Home Buyer?

Anyway yes I believe most stats say that anything that isn't a house (single dwelling) is a unit (apartments, villas, townhouses)

 

It’s a strange one alright.


If a townhouse is a unit than a villa will be too.


Example of villa: 2/2 Lockwood Street, Yokine, WA 6060


But some classified as villas look like houses to me.

 

Ah I see, thanks!

 

In which cases the falls are nothing short of catastrophic.


We are talking about inner ring suburbs that have seen 15% to 20% falls on units (townhouses, villas, apartments) in the last three years alone.


That class of property in areas like Yokine, Mt Lawley, Tuart Hill, Osbourne Park is now at pre-GFC prices from what I can see.

 

On realestate.com.au you will also so places like that listed in the category as houses as it all depends on what the listing agent/assistant selects for the advert but I believe that there is a higher power that will sort them into the right category when it comes to actual statistics.

When you mix a 4 bedroom brand new townhouse with a one bedroom 1960s apartment there is going to be some strange outcomes for statistics. No doubt. Which is why you have to take it with a whole salt shaker of salt.

If you are looking at an suburb then you need to look at current listings and recently sold (last 12mths) of comparable product to determine good value. There is often little point looking at the stats for this type of product. It is not granular enough to offer any sort of information beyond a useless number.

 

Perth has a problem because people are leaving. If they want a recovery they need population growth.

Either a mining uptick - or they should focus on economic diversification. Not easy things to create.