Moderate Perth house price dip shows decline is easing: Domain Group report

The Perth median house price dipped again at the end of 2016 but realtors are expecting a more positive year ahead. 

According to the latest Domain House Price Report, the median for the December quarter dropped by 0.5 per cent to $573,766. 

Domain Group chief economist Andrew Wilson said the moderate decrease signalled an easing of Perth’s rate of price decline, after a period of steep consecutive falls. 

“Although Perth median house prices declined by 2.3 per cent over 2016, the result was less sharp than the previous year’s annual decline of 3.9 per cent,” he said. 

“While the price falls in Perth have continued over the December quarter, the quarterly rate of decline is easing, suggesting that the local market and house prices may be finally reaching a balancing point following the slowdown of the resources boom.”

Dr Wilson said most other capitals recorded their best quarterly results of the year.

Sydney led the way, reporting its strongest growth of the year, rising by 4.7 per cent in the December quarter to a record-high median of $1,123,991. Its 10.7 per cent increase over 2016 was the best result of all the State capitals.

The national median house price of $780,887 was a gain of 7.7 per cent for the year but the lowest annual growth rate in four years.

The only other capital city to see a decline was Darwin, which matched Perth’s 0.5 per cent fall for the December quarter to record a median of $591,167. The northern city slumped 10.5 per cent for the year.  

Hobart remained the most affordable capital city, where despite strong growth of 10.3 per cent for the year, its median is $382,888.

RE/MAX WA managing director Geoff Baldwin said he believed the WA housing market had bottomed out and begun a steady recovery.

“After 2016, which was inarguably the worst period I have experienced in my 30-year real estate career, there has been a significant lift in inquiries and offers since Christmas,” he said. 

“Property prices are steady at the moment after having continually dropped for the previous few years and, although we don’t expect booming conditions, we do predict that the WA market will continue to strengthen as the year progresses, resulting in an increase in prices.

“It’s been my experience that activity in a recovering market can quickly snowball so we shouldn’t be shocked if a real buyer surge happens during the year.”

Mr Baldwin said RE/MAX WA had been receiving increased inquiries from interstate investors, particularly from Sydney and Melbourne.

“It’s worth keeping in mind that it wasn’t that long ago that Perth prices almost caught up to Sydney and were on a par with Melbourne,” he said. “We are now a long way behind both of those cities, however in real estate, history has a habit of repeating.

“Prospective buyers who have been holding off are well advised to act sooner rather than later before the window of opportunity closes completely.”

Peard Real Estate Group chief executive Peter Peard said consumer confidence was still low but he expected house prices to recover by the end of 2017. 

“We keep on saying we are at the bottom but it feels like we are at rock bottom,” he said. “We are seeing some real bargain buying and the buyers are starting to respond and coming into the home opens.”

Mr Peard agreed the time was right for buyers looking for a bargain. 

“It’s always hard to pick the bottom of the market but I am advising my two older children as first home buyers to buy now,” he said.

“Look for bargains as they are out there, the Barnett Government has just increased the first home buyer grant to $15,000. And with free stamp duty up to about $430,000, there couldn’t be a better time to buy a new apartment or build a new home. Or if you’re upgrading, then the bargains are there for the picking.”

Perth’s median unit price also fell, by 1.6 per cent to $369,946, over the December quarter – the lowest recorded since September 2012. Unit prices fell by 6.5 per cent over 2016 – the sharpest annual decline since 2008.

In the rental market, house rents fell by 2.6 per cent for the quarter – down by 8.6 per cent over the year. 

“Perth house rents at $370 per week are now at their lowest level in seven years and, on current trends, are set to soon become the cheapest of all the capitals,” Dr Wilson said.

“Unit rents for Perth were down again – falling by 6.3 per cent to $300 over the quarter to be now down by 14.3 per cent over the past year – the highest annual decline in unit rents on record for the local market.”

At 4.1 per cent, Perth had the highest house vacancy rates in December.