Perth Real Estate: Growth seen in all aspects of market
Sales activity in the Perth metropolitan region increased in July
Sales activity in the Perth metropolitan region increased in July, with REIWA data showing volumes were up 68 per cent compared to the COVID-19 low in April across both dwellings and land sales.
Land saw a 121 per cent increase in sales compared to April, while houses and units enjoyed a 58 per cent and 51 per cent uptick in sales.
Urban Development Institute of Australia (UDIA) WA also noted a massive increase in land sales on the back of state and federal government incentives, with 3322 new lots sold in the June 2020 quarter compared with 1999 in the previous quarter – a 126 per cent increase.
This is the highest number for the June quarter that UDIA WA has recorded since records began in 1990.
UDIA WA said new land prices had remained relatively steady at $226,400, with land prices having risen just 0.8 per cent over the quarter, and two per cent since the same time last year.
Listings for sale in the Perth metropolitan area experienced a small three per cent increase compared to June, according to REIWA, but this is 25 per cent lower than July 2019.
Every capital city, besides Darwin, saw a month increase in stock from June to July 2020, according to SQM Research.
“It is somewhat abnormal to record a rise in listings during the winter months. Normally, falls are recorded,” SQM Research CEO Louis Christopher said.
“This could have been generated by the lifting in restrictions over May and June, enticing sellers to the market.”
This comes off the back of the recent announcement from CoreLogic that the prices of homes nationally dropped 0.6 per cent in July, with Perth witnessing a 0.6 per cent drop for the month.
Regional Western Australia was hit harder, with a 3.2 per cent fall in value over the month.
Despite the dip, REIWA said one in three suburbs recorded an increase in prices.
East Fremantle saw the biggest growth in median house price for the month at 4.8 per cent followed by Pinjarra (3.3 per cent), Rivervale (2.9 per cent), Forrestfield (2.7 per cent) and Yangebup (2.5 per cent).
According to CoreLogic Asia Pacific Head of Research Tim Lawless, housing markets have remained relatively resilient through the COVID-19 period so far.
“The impact from COVID-19 on housing values has been orderly to-date, with CoreLogic’s national index falling only 1.6 per cent since the recent high in April and housing turnover has recovered quickly after it’s sharp fall in late March and April,” he said.
“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.”
However, with fiscal support set to taper from October and repayment holidays expiring at the end of March next year, Mr Lawless believes the medium-term outlook remains skewed to the downside.
“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” he said. “Similarly, the recent concerns of a second wave of the virus and the potential for renewed border closures and stricter social distancing polices are likely to further push consumer sentiment down.
“This is likely to weigh on both homebuying and selling activity more broadly.”