Perth: House Prices Fall, Listings Soar

Perth experienced a fall of almost 3 per cent on the median house price for the March quarter, according to figures released by the Real Estate Institute of Western Australia. The data shows a fall of 2.7 per cent on the median price, pulling it down from $470,000 at the end of last year to around $457,000.

REIWA President Rob Druitt said the retraction in price was caused by a combination of factors including interest rate rises, a drop in overall consumer confidence and a record number of listings now on the market. “Some of this price reduction can be attributed to a small increase in the number of properties being sold at the more affordable end of the market at the expense of premium sales which have slowed. This has skewed the results a little,” Mr Druitt said.

“More importantly, given the flatness in much of the local real estate market following the boom, many investors are withdrawing from Perth property and putting their homes up for sale. This has seen the number of listings grow from around 5,000 to more than 17,000 in just 18 months, flooding the market with choice and giving buyers more competition and more leverage in negotiating on price,” Mr Druitt said.

The REIWA data shows listings have reached 17,600 properties up for sale, including more than 2,400 blocks of residential land, many of which are likely being offloaded by speculators. Mr Druitt said the overall number of selling days had also increased, stretching by six days to 71 days, between a home being listed and a contract for sale being secured.

Mr Druitt said that despite the record number of listings, he was confident the pent up demand from would-be buyers would soak up much of the excess throughout 2008.

“As the population continues to swell on the back of a strong economy, many people have been keenly waiting and watching for the right time to buy. Now, with interest rates on hold and possibly coming down shortly, and property prices rationalising to a more afford able level, we are likely to see some renewed buyer activity in the market. However, until we see a return in buyer confidence we are unlikely to see any significant price growth in the Perth market,” Mr Druitt said.