9th Nov 2015

Oversupply sinks Perth house prices

A big oversupply of properties for sale, anxious buyers and job-loss fears have combined to send Perth’s median house price towards its second significant fall of the year.

Declaring Perth is in the throes of a buyer’s market, the Real Estate Institute of WA has released preliminary website figures showing a $15,000 drop in Perth’s median house price to $535,000 in the past three months.

The early figures, which are often used to pre-empt official house price statistics, point towards a second significant fall in median prices this year.

In June 2015, REIWA’s official house price statistics showed a $20,000 drop in three months — the biggest decrease in two years.

REIWA deputy president Hayden Groves said there were about 15,000 properties for sale in Perth, which far surpassed normal levels.

“As soon as you get above 12,000 properties (on the market), you’re in a buyer’s market,” Mr Groves said.

“It’s not all doom and gloom — there are some great buys out there, money is cheap to get and properties are becoming more affordable.”

Mr Groves said despite lower prices, there was still little confidence in the property market.

He said Perth’s most expensive homes had struggled to sell because buyers feared losing their jobs in the resources industry.

Others, he said, believed there was still room for prices to fall.

“Buyers tend to hold off because they want to try to pick the bottom of the market,” Mr Groves said.

“But, as a buyer, if you’re waiting around trying to pick the bottom of the market, you’ll be one of a thousand that does,” he said.

Property valuer Gavin Hegney predicted it would be at least six months before buyers returned to the market, saying many recognised there were bargain prices in some higher-end suburbs.

Article published in ‘The West Australian’ dated 7 October 2015.