Perth residential property market moves into recovery phase
At long last, I can say that Perth has moved into a recovery phase, after four tough years.
For the past 12-18 months, many industry people with a vested interest have been trying to talk up the market, creating false dawns of market revival.
I’ve been awaiting clear evidence and a month ago I wrote: “I continue to seek confirmation that the worst has passed for the Western Australia economy and the Perth residential property market. There are growing signs that this is the case.”
Now, having completed the research for the Winter Edition of The Predictor Price Index, I feel confident to confirm that Perth is over the worst and is on the way back.
The research found something that’s been missing from the Perth market for the past few years: suburbs where sales activity is growing and there are some prospects for prices to stop falling.
Our latest survey identified 12 growth markets, a rising number of suburbs with consistent sales and fewer “danger markets”. This is the best result for Perth since mid-2015.
Four precincts dominate this brighter picture of the Perth market: the Wanneroo and Joondalup LGAs in the far north and two solid middle-market areas, the Stirling and Melville LGAs.
Wanneroo is the standout location in the current Perth, providing four of the 12 suburbs with rising markets - Alkimos, Carramar, Clarkson and Yanchep.
Another northern precinct, the LGA of Joondalup, has been the steadiest area of Perth during the downturn and it continues to show solidity. It has seven suburbs with consistent sales rates - including Duncraig, Heathridge, Joondalup, Ocean Reef and Kingsley - while Sorrento is now a growth market in this precinct.
The municipality of Stirling stands out for sterling performance in the downturn. Two suburbs have rising markets - Carine and Innaloo - while this LGA has eight suburbs with consistent sales.
Another leader of Perth’s fightback is the Melville LGA in the southern suburbs. Both Kardinya and Leeming now have increasing sales activity, while four other suburbs are consistent performers.
Suburbs which have maintained solid sales rates amid the prolonged downturn across the Perth metropolitan area are noteworthy. They include Claremont, which has recorded between 55 and 67 sales every quarter for the past three years. Hamilton Hill has delivered between 58 and 69 sales every quarter for three years, while Willeton has managed between 80 and 88 sales, quarter after quarter, in the same time frame.
Another positive sign for Perth is the reduction in the number of danger markets (where sales activity has dropped to levels well below what might be considered acceptable in a “normal” market).
If the current trend continues, danger markets may disappear from the Perth property scene later in the year.
The existing declining markets are spread across the Perth metro area, but the area of greatest concern remains the inner-city precinct dominated by apartments.
These locations have high vacancies at a time when sales activity is still trending down. The worst-placed markets are East Perth, central Perth and Como.
The vacancy rate is 5% or higher in these locations and sales are well below the levels of a “normal” market.
Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.
