Over the late few weeks both the Unconventional Economist and I have highlighted the on going delusion in Western Australian real estate. Today I note that Perth is taking another hit from the MSM:
Perth’s ailing property market is causing home owners to maintain a firm grip on their properties, waiting on average two years longer to sell than they did five years ago, sales data shows.
Houses in the city are being held for an average of 7.5 years before being sold, significantly longer than the average 5.6 years at June 2006 and 5.3 years at June 2001, according to RP Data.
Unit owners are waiting 7.2 years before selling, compared to 5.3 years at June 2006 and 5.1 years at June 2001.
New WA property sales activity data also released today shows the biggest property slump in 30 years, excluding the 2000-2001 anomaly year when the goods and services tax was introduced.
There was a whopping 25 per cent decrease in property transactions during July compared to June, and a 10 per cent decline over the year, according to the state’s official land information authority Landgate.
The activity was 30 per cent below levels experienced during the boom years of 2005-2006.
RPData’s blog also has some data today about Perth’s prestige market showing the top 20% market is the worst performing of all capital cities:
Perth, which has the largest prestige market outside of Sydney and Melbourne, is showing a drop of close to 30% in volumes compared with the average.
Interestingly that greater price decrease is on the back of lesser falls compared to other markets. This suggests that Perth is more sensitive to changes in activity than other centres:
But it is good to know that even in real estate the “two speed economy” is running at strength:
The opposite is occurring in West Australian mining towns, where homes are being sold at the quickest rate in the country, according to RP Data.
Port Hedland had the shortest hold period in the country during 2010-11, at just 4.7 years.
“Mining regions feature heavily in the list of regions with the shortest average hold period,” RP Data researcher Cameron Kusher said.
“None of those council areas listed [as having the shortest hold periods] are within a capital city. In fact, most of the regions listed aren’t even within a major regional population centre.”
According to REIWA:
The median house price is now at the same level as December 2007, at $475,000, according to the Real Estate Institute of WA.
This would put it on par with Brisbane. If that is true then first home buyer grant boost users in Perth got sold a giant lemon and a large cohort of young families are potentially holding underwater mortgages in the western state.
