With dwelling values falling, there are plenty of opportunities for buyers in Perth. Picture: Getty
Hopes of a new year property market recovery in Perth have been dashed, with new data showing house values across the city dropped in February.
The CoreLogic Hedonic Home Value Index, released on Wednesday, shows dwelling values in Perth decreased by 2.4% in February, heralding a 4.5% downturn in the past year.
After a small rise in property prices in January, signs of a market recovery appear to have been short-lived.
The data shows that house values suffered a 2.4% price drop, while units declined marginally more with a 2.8% decrease.
The trend is in contrast to Sydney and Melbourne where house values have more than doubled in Sydney and Melbourne has seen an 87% rise in values since the beginning of 2009.
CoreLogic Head of Research Tim Lawless says it appears any hopes that Perth’s property market was on the improve in January appeared premature.
“Previous downturns in the housing market have only lasted 12 to 24 months, so the current downturn across the Perth market has already been sustained for longer than normal,” Lawless says.
“That shouldn’t come as a surprise considering the size of the upswing in prices prior to the end of the commodity boom, but also relative to the sharp decline in both overseas and interstate migration rates.”
While dwelling values are down, the number of days a property spends on market before it is sold has also fallen. Picture: Getty
Lawless says since dwelling values peaked in December 2014, Perth prices had fallen by a cumulative 10% but it isn’t all doom and gloom.
“Some of other positive indicators we have been seeing across the Perth housing market were a reducing in average selling time, which had reduced from 73 days in August last year to 58 days by the end of December as well as a stabilisation in transaction volumes which had previously been trending lower,” he says.
“Without a doubt, the Perth housing market is a buyer’s market. Buyers can choose from a large pool of advertised stock, they can negotiate hard and take their time to make a purchase decision.
“Vendors, on the other hand, will need to be realistic in their price expectations and expect some cheeky offers to arrive before they sell their property.”
Property Council of WA executive director Lino Iacomella says it is disappointing that Perth’s house values took a dip in February after hopes of a new year improvement in January.
“The market in Perth is still trying to find its feet after a long period of adjustment,” Iacomella says.
“There are some signs of growth but it’s disappointing that the market went backwards in February. It’s also disappointing that in the lead-up to the (state) election, that there’s been talk of a foreign investor tax – that hurts market confidence as well.
“Now, it’s all about regaining confidence and we’re hopeful that after the election things will settle down.”
Iacomella says major political parties need policies to promote growth and, most importantly, promote population growth to help the property market recovery.