Perth’s beleaguered property market could finally be showing signs of recovery, according to a new report.
Property consultant CoreLogic released its latest figures on Monday morning showing Perth house values fell by 0.1 per cent through September.
Are Perth house prices finally recovering. Photo: Henry Zwartz
The minuscule fall might seem insignificant given the hot east coast property market, but given Perth prices have continued to fall over the past few years, it could be the first signs of a rebound.
It comes on the back of CoreLogic figures released in June, which found Perth house prices recorded their biggest one month rise in more than a year, going up 1.4 per cent for the month.
Units in Perth continue to buck the downward trend with median prices rising by 0.8 per cent in September on the back of a 1.1 per cent rise in the June quarter.
Despite the local property scene looking like it has finally bottomed out, Perth still has a long way to go with house prices over the last 12 months falling by 2.9 per cent.
Herron Todd White managing director Brendon Ptolomey said the housing recovery was well and truly under way in WA, particularly in the wealthy western suburbs.
“Whilst first homebuyer suburbs wallow in over-supply, the western suburbs are set to feel the effect of price growth for the first time in seven years,” he told WAtoday.
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“Cottesloe currently has 42 single residential dwellings on the market, of these 20 are under contract or sold, meaning that, during the spring rush to market, there are only 22 single residential dwellings on the market.
“This under supply can only lead to inflationary price pressure. A similar scenario exists in Dalkeith and Nedlands with 21 and 20 single residential dwellings respectively on the market.”
Mr Ptolomey had some bad news however for investors who want to snap up a bargain near the Perth CBD.
“The tipping point has past, the bargains have been snapped up, the boat has sailed,” he said.
“However, with every stage in the market, opportunity exists for those owners in Cottesloe, Dalkeith and Nedlands who held onto their assets through the price correction, being first to market in spring may bring a better than expected price and a sale in quick time.
“For bargain hunters, it may be time to look further out from the near city suburbs and for investors, it is most likely time to look through the over supplied suburbs for a decent quality home with good rental prospects, it is likely that some of those properties will never be cheaper.”
In the east, the overheated Sydney market could be showing the first signs of cooling with prices declining for the first time in 17 months.
Prices in Sydney eased 0.1 per cent in September, dragging the annual pace back to 10.5 per cent from 13 per cent in August.
“This slowing in the combined capitals growth trend is heavily influenced by conditions across the Sydney market where capital gains have stalled,” CoreLogic head of research Tim Lawless said.
A slowdown is much desired by the country’s main bank watchdog which has tightened standards on investment and interest-only loans, leading banks to raise rates on some mortgage products.
The Reserve Bank of Australia (RBA) has also been concerned that debt-fuelled speculation in property could ultimately hurt both consumers and banks.
Melbourne fared much better, however, with prices rising 0.9 percent for September and 12.1 percent on the year.
“The stronger housing market conditions in Melbourne are supported by auction clearance rates which have consistently remained above 70 percent,” Mr Lawless said.
“Additionally, advertised stock levels remain remarkably low and private treaty sales continue to sell rapidly, averaging 30 days on market.”
Conditions varied widely across other cities, with Hobart rising 14 percent on the year.
Outside the cities, prices edged up 0.1 per cent in September to be 5.6 percent higher for the year.
The RBA holds its October policy meeting on Tuesday and is considered certain to keep rates steady again, in part because any further easing might only encourage more borrowing by already heavily indebted households.
The inexorable price rise in the major cities has taken homes out of the reach of many first-time buyers and become a political hot potato.
The conservative government of Malcolm Turnbull has blamed a lack of supply for the problem, while the opposition Labor Party has pointed the finger at favourable tax treatment for property investment.