All indicators point deep south for Perth housing

By Leith van Onselen

As has been well documented on this blog, Perth’s housing market is deteriorating fast as the epic commodity price and mining investment boom unravels.

This weakness has been most evident by Perth house prices, which have fallen by 4.9% so far this calendar year, according to RP Data, with a clear downwards trend (see below charts):

ScreenHunter_10962 Dec. 15 14.44
ScreenHunter_10961 Dec. 15 14.43
ScreenHunter_10960 Dec. 15 14.42

And Perth asking rents, which are a sea of red, according to SQM Research:

ScreenHunter_10963 Dec. 15 16.37

Perth rental vacancies have also skyrocketed, hitting a nation high 3.9% in November, according to SQM Research:

ScreenHunter_10966 Dec. 15 16.44

Whereas the REIWA has the Perth rental vacancy rate at a whopping 5.6%:

ScreenHunter_10967 Dec. 15 16.46

WA property transactions are also continue to plummet, with the latest data from WA’s Landgate revealing that statewide housing transfers in August were down 23% from August 2014, with rolling annual volumes also down 14% as at August:

ScreenHunter_10964 Dec. 15 16.38

To add insult to injury, housing construction is rocketing just as population growth in WA is falling through the floor:

ScreenHunter_10968 Dec. 15 16.52

All of which suggests that the pressure on vacancy rates, rents and prices will only continue to grow.

And this is before we even consider the poor outlook for the WA economy, which is facing sharp falls in mining capex accompanied by an employment shock:

ScreenHunter_10969 Dec. 15 16.53

In short, all indicators continue to point downwards for Perth’s housing market.

[email protected]

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Unconventional Economist (see all)

Comments are hidden for Membership Subscribers only.