The month in review: Perth

By Herron Todd White
June, 2009

If there is one sector of the market that has “gone missing” in football speak, it is the trade up buyers. This lack of activity has lead the market slow down.

The strong activity in the first home buyers sector has decreased the price differential to the middle tier, and combined with low interest rates and job security (for some), the ability to upgrade has not been this easy for many years.

It seems that just as the Federal government has announced the winding down of the first home buyers grant, the flow on effects are just starting to be seen.

First home buyers have been a very significant sector for the Perth real estate market over the last 12 months, with many agents in these areas achieving ‘best on record’figures through the first quarter of 2009. The majority of this activity has been limited to below $600,000, which has been sufficient to give many sellers the leg up they need to break into the next tier, where they can pick and choose to suit both their wants and their needs.

Well presented properties continue to record premium sale prices and quicker selling periods. The last 12 months have been reasonably quiet in the $500,000 - $1,000,000 price bracket, however some pockets of Perth are now seeing an increase in activity. Activity in developing suburbs such as Canning Vale remains very strong, with educated buyers selling their original homes and scooping up better quality dwellings in superior locations. We note that one prominent local agent sold over $13.l5 million worth of property in and
around Canning Vale through April alone! The riverside suburb of Como is experiencing a shortage of stock up to $900,000, whilst well located suburbs of Palmyra, Melville, Kardinya and Willagee have seen an increase in activity over the last 3 months up to $800,000.

Activity for lifestyle and acreage properties remains slow and values have trended downwards over the last 12 months. One specific example in semi rural Oakford has seen an acreage property transact for 15% less than it did 21 months ago.

The dominant buyer profile remains professional couples looking to upgrade although there has been an increase in older couples downgrading in size, but into better locations.

All in all, there are many buyers within the second tier sector ready to upgrade, but there remains no sense of urgency with the Buyers in control and very educated as to what they can achieve.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © 2008 Smartline Home Loans P/L. ABN 38 085 370 270