Perth house prices rise in December quarter

Perth house prices increased by 1.1 per cent in the December quarter 2007.

This follows a 1.3 per cent rise in the September quarter. Together these quarterly increases have clawed back all of the fall in prices experienced in the June quarter.

Data released today by the Real Estate Institute of Western Australia shows that the median price of $461,000 for the September quarter climbed to around $466,000 at the end of last year.

It is marginally above the $465,000 median reached in the March quarter last year and 1.3 per cent above the December quarter 2006

REIWA President Rob Druitt said that indications are that sales volumes remained steady in the December quarter but were down about 10 per cent on the surge experienced in the June quarter.

"However, December's sales volumes are still 25 per cent above the December figure for 2006 when the effects of the market slowdown were really starting to bite," Mr Druitt said.

"We are still seeing price volatility at suburb level between quarters, but there has been no wholesale downturn across the board as some property commentators have been prophesying over the last 12 months.

"Clearly the Perth market is very resilient. And why wouldn't it be with WA continuing to lead the country in terms of business investment, exports, employment and population growth?" Mr Druitt said.

According to REIWA, the high levels of listings in 2007 which peaked in early December have now contracted to 13,400 dwellings for sale. The steady flow of sales has also seen the average number of selling days decline marginally from 68 to 65 days during the December quarter.

"The slowdown in new housing activity in 2007 and continuing strong population growth will maintain the demand for housing whether for sale or rent during 2008.

"The only immediate risks to the steadying of the local markets are the spectre of further interest rate rises and ongoing affordability pressures that may be restricting potential first home buyers," Mr Druitt said.

In regional WA, preliminary figures suggest that the median price in Mandurah-Murray continued to slide in the December quarter, whilst the overall median price in both Bunbury and Geraldton has remained steady.

Official data due for release in mid February are likely to show that the Mandurah market has experienced its third consecutive quarter of decline. Listings in this region remain at high levels, up 63 per cent on the same time 12 months ago.

** Rents & Vacancy Rates

Preliminary data indicate the seasonal tightening of the rental market has commenced with Perth's vacancy rate falling from 2.5 per cent to 1.9 per cent.

"REIWA expects this figure to drop lower in the March quarter as new households seek out properties for lease.

"The March quarter is traditionally the tightest quarter for rental vacancies with the figure in March last year falling to an historic low of 0.8 per cent," Mr Druitt said.

The fall in the vacancy rate in the December quarter was accompanied by a 6.7 per cent increase in the overall median rent for new tenancies in Perth which jumped by $20 to $320 per week.

House rents were the bigger mover, rising $20 in the quarter after stagnating in the September quarter, whilst the median rent for units increased by $10 in the December quarter to a new median of $300 per week.

During 2007, overall median rents rose by 23 per cent or $60 per week.

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