Mild dips to Perth home values

Home values in Perth have recorded a marginal 1.1 per cent decline, matching the small dips logged in the Melbourne, Sydney, Brisbane and Adelaide residential markets for two consecutive months.

The faltering prices noted in CoreLogic’s Hedonic Home Value Index for June comes after six months of steady going in Western Australia, before a 0.6 per cent drop in May sparked a slow move backwards.

As of June 30, Perth’s median home value was $441,977 – a slight fall from the $443,669 median price clocked on May 31.

CoreLogic Head of Research Tim Lawless said other Australian major cities were not used to annual growth interruption but Perth and Darwin experienced yearly dips and the current punctures were mild.

“The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3 per cent over the past two months,” he said. “A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus.

“Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.

“While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans.

“The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”

While housing prices are slowly trending downward, Perth and Adelaide have boasted Australia’s strongest rent prices, which CoreLogic attributed to a tighter supply of rental property.

Perth landlords have been receiving 4.3 per cent more money on house rentals and 5.2 per cent more on unit rentals before tax, following a one per cent and a 0.1 per cent change in rent across Perth houses and units respectively in June.

Although Perth home values have been pulled back, REIWA reported strong sales numbers for June, revealing it was the strongest month for sales in Perth since 2015.

Transactions increased 55.1 per cent more than May sales figures and 45 per cent higher than June last year.

Most properties snapped up were established dwellings, with 2519 sales taking place, while land was up a whopping 289 per cent with 1471 transactions.

Willetton, Thornlie, Girrawheen, Dudley Park and High Wycombe saw the biggest rise in property sales and REIWA President Damian Collins said it was obvious Federal and State Government moves to make building property cheaper was behind the upswing.

“The large spike that we have seen in land transactions can be attributed to people fearing that they may miss out on these grants,” he said. “There is a real possibility that we will run out of titled and completed blocks in the coming months.”

Despite the strong sales, listings continued to flounder in June, with only 10,310 properties on the market, reflecting a nine per cent drop.

According to REIWA data, Perth’s rental market also continued to constrict, with a 15 per cent plummet taking the total number of available rentals to just 3963 dwellings.

REIWA expects the vacancy rate to dive even further than the 2.2 per cent empty rate, with many real estate agents reporting their vacant stock is as low as one per cent.