Market solid, by any measure

Perth’s median house price increased by $10,000 in the March quarter to $470,000, according to the Real Estate Institute of Western Australia, contradicting an earlier forecast by property analysts, Residex.

REIWA president Rob Druitt said its figure represented growth of 2.2 per cent over the quarter from the $460,000 median house price for December.

“As further sales evidence is received, we think it’s likely it will show that some suburbs have experienced further corrections in their median price as what was experienced in the December quarter,” he said.

Residex reported the value of an average house in Perth had fallen by almost $10,000 in the past three months to $485,887, down from $495,299 when it peaked in November last year.

REIWA director policy and research, Stewart Darby, said the volume of sales in the March quarter was up by 15 per cent, which was a strong indication that the market was not in retreat.

“Our sample is at 65 per cent and the indication already is that suburbs are not going anywhere near backwards,” he said.

Mr Druitt said available listings had continued to increase significantly during the period, rising by 21 per cent to 13,800 dwellings at the end of March.

REIWA’s preliminary March median of $470,000 for Perth appears modest in comparison, with the median figure of $485, 887 put forward by property monitors Residex.

The agency reported the Residex’s calculation method is based on the ‘repeat sales method’, which measures the price growth between when a house was first sold and last sold, eliminating any potential price skewing caused by a small sales volumes in certain suburbs.

However, Mr Darby said Residex’s calculations appeared to be based on a limited sample of settled properties.

Meanwhile, a survey released last week by the Housing Industry Association found new home sales in WA fell 12.7 per cent in March, to 1,272, from the February rate.

This represented a fall of 18.3 per cent from the March quarterly rate last year, according to the survey, which consulted 100 major residential builders.

New home sales during the month were flat at a national level, maintaining a steady rate of 8,191 dwellings, after three months of gains.

During the first quarter of 2007, sales were 16 per cent lower than in the three months to March 2006, having declined in every mainland state in that time.

HIA chief economist Harley Dale said a large gap between the desire for home ownership and housing affordability had stunted buyer activity in the traditionally strong early part of the year.

“The lack of a concerted effort by all levels of government to alleviate record-low housing affordability is standing in the way of a sustained recovery emerging,” he said.

“The recent threat of higher interest rates has only served to reinforce the urgency required in addressing the hefty structural barriers to home ownership.”

The survey also showed an increase of 0.2 per cent in private detached house sales during March, to 7,228, which was 19.5 per cent lower than a year ago.
Multi-unit sales declined by two per cent to 963 during the same period, representing a decrease of 14.9 per cent since March last year.