While the picture of the state of Australia’s property markets painted by media and industry commentators has been less than rosy in recent times, spare a though for the poor home owners of the west.
Over in sunny WA, vendors have been anxiously hoping for a turnaround in real estate fortunes as houses languish on the market for months on end and prices are slashed by many desperate sellers.
Thankfully though things seem to be on the improve for Western Australia, with recent data revealing a significant 20 per cent increase in sales during the month of August, finally breaking the state’s record property transaction drought.
According to a WA Today article, the state’s land authority Landgate reported the settlement of nearly 5900 homes during August, representing the largest increase in activity for six years and an improvement of 23.9 per cent o July’s numbers.
This turnaround in fortunes could not have come at a better time, with thousands of dejected real estate agents and sellers left reeling in the first half of 2011 by the lowest number of housing transactions in ten years and a massive 15 per cent fall in the year to April.
The New Year failed to ring in good tidings for WA, with January and February recording the lowest number of property transfers in almost 20 years, while March was only marginally better with the worst results in 14 years.
With August traditionally considered the market’s slowest month, Real Estate Institute of WA president Alan Burke is confident that the spring-summer period will bring a welcome increase in sales activity, saying anecdotal reports from local agents suggest a further pick up in the number of transactions for September.
Further boosting confidence is a marked decline in the number of properties listed for sale, from a staggering 18,000 as buyers pulled out of a stagnant market in droves a few months ago, to a healthier 15,000.
“We are seeing a pick-up in activity without a doubt,” says Burke. “A bit of ground swell for demand seems to be coming through and is being recorded in a) sales and b) settlements.
“[For example] my agency is doing four auctions at the moment. We haven’t seen four auctions for a long, long time.
“We’re getting more people through home opens, as well. Traditionally [the industry notices that] once the [AFL] grand final is over people leave their TVs and start buying houses.”
Here’s hoping that with the apparent recent boost to buyer confidence in the west, prices will stop their downward trajectory which pushed the local housing market into a record long recession.
According to Australian Property Monitors, Perth’s median house and unit prices declined for four consecutive quarters to June 2010, with the only redeeming news being that the value of the decline – about 8 per cent – is lower than the 12 per cent drop following the global financial crisis.
Landgate chief executive Mike Bradford welcomed the increase in property activity during August, describing it as “notable”, even though overall property activity was still down 25 per cent compared to the boom of 2005-06.
In response to the state’s housing shortage and as a further positive sign of an impending recovery, developers led the recent increase in activity, creating 1250 new subdivisional lots in August, up by 56.8 per cent from July (797) and 33.4 per cent from August 2010 (937).
Urban Development Institute of Australia WA president Debra Goostrey said it appeared confidence in the market was improving.
“By anybody’s estimation [the August figures] are a very large jump,” she said. “It’s probably worth further investigation before people call [that] the market has tipped over into recovery but it’s a positive sign.”
Bourke adds, “It’s heartening when you see the number of new titles created – developers are getting ready for an uptake of demand.”
Recently leading economists BIS Shrapnel released their latest forecasts for our property markets and suggest the underlying strength of the Australian economy, stable interest rates in the short term, high immigration and a dire shortage of houses, will once again drive up property prices.
The report forecasts the Perth median house will lift by 19 per cent over the three years to June 2014.
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