Oliver Searles - Perth Real Estate Agent

The Perth market recovery has been driven by the return of first home buyers. According to the latest figures from the Office of State Revenue first home buyer levels have been at the highest level since March 2010 just after the First Home Buyers Boost ended. 2,933 First Home Owner Grants (FHOG) were paid in the March quarter, just short of the quarterly average for the grant since its introduction in 2000.

This is a good sign for the Perth property market as First Home Buyers are a keen ingredient as they generally purchase properties at the lower end of the housing market allowing more people to trade up to more expensive properties.

Perth rents are expected to surge because of an undersupply that has already pushed up weekly rents by $15 since mid year. The median rental figure is now $395 per week. The rental vacancy rate has dropped to 2.8% in September down from 3.4% in June. The sluggish property sales market has caused this upturn in the rental market.

The number of properties for sale in Perth has fallen to under 15,000 which is an 18% drop from the years peak of 18,2000 in mid April. Most of this has come from a 20% reduction in properties for sale. According to preliminary REIWA figures sales volume has increased 1% in September which is at least a step in the right direction.

892 first home buyers received the First Home Owner Grant last month, the number since the Government scrapped the First Hombuyers Boost in December 2009.  This upturn may be an early recovery sign given that most first homebuyers are purchasing a property from a seller looking to trade up, which in turn simulates the entire market. The figure is still 15% below the 11 year average however so improvement is still needed.

The median entry house price for first homebuyers is $410,000. According to REIWA the top areas for first homebuyer activity is Baldivis, Canning Vale, Ellenbrook, Banksia Grove and Piara Waters.

According to the Housing Industry of Australia (HIA) property prices in Perth are set to boom amid predictions of a housing shortage of 100,000 homes by 2020. The Housing to 2020 report released by HIA recently said WA would need 112,000 more dwellings by 2020 if the current building rate of 20,000 homes a year contuined. Western Australia would have to boost construction by 43% to create an extra 31,700 homes every year until 2020 to cover both the existing undersupply and future demand. Currently there is a shortage of 32,000 dwellings.

MY THOUGHTS:

I think we need to take articles like this with a grain of salt. I do see the Perth property market recovering and in the long term prices rising but in the short to middle term i do not see prices soaring.