Posted on Thursday, October 8th, 2015 in by Matt Garmony
The Perth residential property market is in a decline phase with the median house price falling from $550,000 in March 2015 to $540,000 in June 2015 according to Real Estate Institute of Western Australia (REIWA). Our enquiries to residential real estate agents within the Perth metropolitan area are indicating reduced interest in properties listed on the market for sale, properties are taking longer to sell and there are is increased number of property listed on the market. The latest REIWA Statistics for the first week in October 2015 are indicating there are 15,198 properties listed on the market for sale which is up from 13,970 from 4 weeks ago and up from 10,595 from the same week last year. There is less interest in the market place by potential buyers who are proceeding with caution with their property related decisions with the greatest effect being on properties towards the upper end of the market value range from $1,000,000 to $2,000,000 in most market segments. Sales of residential vacant lots in the fringe metropolitan locations have slowed and with the a large number of residential homes and apartments nearing completion in the next 6 to 18 months, the market may experience an oversupply which will put further downward pressure on property prices. The number of residential rental properties listed on the market has increased and the median market rents have fallen.
The Reserve Bank of Australia (RBA) agreed to hold the official cash rate at 2% at the 6 October 2015 Board meeting on the back of further softening of economic conditions in China and East Asia, although they stated there has been moderate growth in the global economy. The RBA last cut the interest rate to 2.0% in May 2015. The RBA Governor Glenn Stevens stated that “The global economy is expanding at a moderate pace”, and “while growth has been somewhat below longer-term averages for some time, it has been accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year.” The Governor indicated that “the economy is likely to be operating with a degree of spare capacity for some time yet”.
In a declining market, it is important to obtain accurate, independent property valuation advice from a experienced licensed valuer. Buyers need to make sure they do not pay too much for a property in a falling (buyers) market, and sellers need to make sure they list the property at the right price to meet the market, to avoid listing their property at an asking price that is too high and running the risk of deterring buyers. Please contact our valuers for pre-purchase and pre-sale property valuation advice.