“Strong first-home buyer activity is a terrific stimulus for the entire housing system."
Upmarket Mt Lawley and blue-collar Calista lead 2.3% gain in Perth property prices in December quarter: REIWA
Perth residential property prices kept up with inflation over the December 2012 quarter, rising by 2.3%, with increased first-home buyer activity and a tight rental market key factors, according to the Real Estate Institute of Western Australia (REIWA).
House prices gained 3% or $15,000 over the quarter to a median of $495,000, while units rose a more modest 2% to a median of $410,000.
Perth house prices are now just $7,500 off their March 2010 peak, with REIWA president David Airey saying strong first-home buyer activity meant that many people looking to sell an existing home and move on "had a ready pool of eager buyers".
“Strong first-home buyer activity is a terrific stimulus for the entire housing system," says Airey.
“This scenario is reflected in the fact that that the top two suburbs for price growth in the December quarter were outer-suburban, affordable Calista and gentrified, upper-market Mount Lawley,” he says.
Other Perth’s key housing statistics are trending in the right direction, indicating that forecasters are correct in predicting the WA capital to be the top-performing capital city in 2013.
The number of selling days decreased from 71 to 62; the number of sellers dropping their asking price has fallen from almost 60% to around 55%, with dwellings sales across the state estimated at 11,600 for the quarter – around 15% up on the same time last year.
The REIWA also anticipates the Perth rental market will tighten from its current already tight vacancy rate of 1.9% in the March quarter. The median rent remained unchanged at $450 per week over the quarter.
Top 10 suburbs over December quarter
The upper-crust inner-northern suburb of Mt Lawley was the top performer over the quarter and the year, with median house prices up 9.5% to $1.02 million from 90 sales.
Mt Lawley is also the top-performing suburb for the calendar year, with house prices up 19.6%.
Last year, residents of Mt Lawley were up in arms when it was revealed that McDonald's planned to open a restaurant in a popular spot – it was later declared a hoax.
Recent sales include a three-bedroom house on First Avenue, Mt Lawley, that sold for $1.07 in November last year having previously sold for $879,000 in January 2011 – annual price appreciation of around 11%.
The highest price recorded over the year in Mt Lawley was $3.025 million paid for a three-bedroom Art Nouveau home built circa 1913 at 73 Farnley Street featuring custom-designed stained-glass windows in nearly every room of the style of the architectural period.
The second best performing suburb over the quarter was the blue-collar outer-southern suburb of Calista, where house prices rose 8.4% over the year to a median of $265,500 from 36 sales. House prices in Calista were down 1.7% for the year.
“The lift in median price was due to a welcome surge in turnover with more expensive properties, particularly in the $600,000 - $700,000 range,” says Airey.
In contrast to the struggling Melbourne land market, preliminary estimates indicate Perth will record nearly 12,000 land sales for the 2012 year, which is a 37% increase on 2011. The southwest and northwest corridors accounted for half the sales.
The Urban Development Institute of Australia (UDIA) said the biggest developers in Perth recorded a 23.4% rise in land sales over the December quarter
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 kilometres of the CBD,” says Airey.
Aerial photo of Mt Lawley by Dan Woods, courtesy of Flickr.