Perth property prices just $7,500 shy of all-time peak

There was a clear lift in both the median house price and turnover in the property market in Perth at the end of last year, according to Real Estate Institute of Western Australia data released on Friday.

The institute’s December quarter results put the Perth median house price at $495,000, up by more than 3%, or $15,000, on the previous quarter.

It is now only $7,500 shy of Perth’s all-time peak from March 2010.

The lift in median prices is due to a welcome surge in turnover of more expensive properties, particularly in the $600,000 to $700,000 range.

Very strong first-home buyer activity means that many people looking to sell an existing home and move on have a ready pool of eager buyers.

Strong first-home buyer activity is a terrific stimulus for the entire housing system.

This scenario is reflected in the fact that the top two suburbs for price growth in the December quarter were outer-suburban, affordable, Calista and gentrified, upper-market Mount Lawley.

REIWA reports a modest rise in metropolitan unit and apartment prices of around 2% to a median of $410,000. It is not surprising stronger growth is mostly with inner-city areas such as Highgate and Burswood, where demand was higher.

The more interesting news to come from our December analysis is that the average number of days it takes to sell property has dropped from 71 to 62 and the number of sellers dropping their asking price has fallen from almost 60% to around 55%. Together, these factors illustrate that the market is clearly improving as sellers get the pricing right and buyers respond in better time.

Of those sellers who dropped their asking price to seal the deal, the average discount was 5.5 per cent. The percentage of discounting also seems to be trending down as the market improves.

Total dwellings sales statewide for the December quarter are estimated at 11,600, around 15% up on the same time last year.

The regional market was pretty stable, with the median house price unchanged at $365,000 and virtually equal to a year ago. Blocks of land in country WA are also sitting still at a median of $165,000, although regional units and apartments slipped a little, dipping by just over 3 per cent to $315,000.

The Perth rental market is still tight. The equilibrium for the metropolitan vacancy rate is 3%, but currently we’re at 1.9%, and this is likely to shrink further during the March quarter, a traditionally busy period in the rental sector.

The Perth median rent remained stable at $450 per week during the December quarter, marking the first time in year that the median rent has not crept up. However, while the median remains unchanged, rents specifically for houses went up by $10 to $460 per week and for units and apartments dropped by $10 to $420 per week.

Preliminary estimates indicate Perth will record nearly 12,000 land sales for the 2012 year, which is a 37% increase on 2011. The south-west and north-west corridors accounted for half the sales.

The south-west corridor covering the Cockburn and Rockingham-Kwinana regions is the most affordable area in Perth in which to buy land, with an annual median of $210,000.

By contrast, the median land price in the northwest corridor, covering the Joondalup and Wanneroo local authorities, was higher at $240,000 across last year, while a median of $394,000 was determined for blocks that are within roughly ten kilometers of the CBD.

REIWA data on annual medians across 2012, show that in the regions, Port Hedland finished the year with 12% growth and a median price of $880,000, providing further evidence that sections of the mining sector are still having a profound effect on property in parts of the northwest.

Kalgoorlie-Boulder was the second best regional performer, with 4% growth during the year and a median price of around $343,000.

In the midwest, Geraldton-Greenough experienced just under 3% growth and settled with a median house price of $380,000.

Mandurah-Murray and Busselton both grew by 1.6% over the year, with median house prices of $380,000 and $416,500 respectively.

Bunbury recorded modest growth of 1.4% in 2012, to a median price of $365,000.

The poor performer was Albany, dropping to a median of $355,000 after experiencing negative growth of 4.4% over the year.

To put these regional figures in context, metropolitan Perth had overall growth in 2012 of 2.3%, although 2013 looks like being a better performer right across the board.