Perth’s property market is yet to show signs of improvement that has so often been forecasted. Over the last 3 months dwelling values around Perth have gone down 2.2 per cent, falling 0.5 per cent over the July month taking the value of dwellings to a low of -8.9 per cent over the last year. As a result of this, dwelling prices in the Perth area are now -20.2 per cent below what they were when the market peaked in June 2014. Unfavourable economic conditions in combination with a tight credit environment is likely to result in house and unit prices bottoming out over the spring period. House and unit prices are expected to stay at the June median of $520,000 and $330,000 respectively. Despite some positive signs, properties that are listed on the market are taking longer to sell in comparison to recent years with the median days in July 2019 being 66 in comparison to 59 in July 2018.
On the other hand, the Perth rental market is showing positive signs as it continues to strengthen. During the first quarter of the year rental agreements increased 131 per cent in comparison to the first quarter of 2018. Another sign of further improvement is that the Perth rental vacancy rate has dropped from 3.8 per cent to 3 per cent within the last year. The driving force behind the growth of the rental market is believed to be an improvement in the WA economy and an increase in population growth throughout the state, with an influx of interstate workers moving to WA for more opportunity a key reason behind this.
However, it is not all doom and gloom for the Perth market with many economists and property experts tipping a rebound in Perth house prices in late 2019 leading into 2020. The improvement is expected to be as a result of increase in population, cuts to interest rates, a growing demand for workers and an overall decline in unemployment. First home owners have been a driving force behind housing demand due to the benefits of the First Home Owners Grant along with less interest from investors, declined mortgage rates and overall increase in affordability. With some positive signs on the horizon we remain optimistic that the Perth property market is heading in the right direction.