Perth property drops a gear

WESTERN Australia’s residential real estate sector has been confirmed as the weakest performing in the nation, according to three separate analyses of the market.

Earlier this week, RP Data-Rismark’s home value index showed home values in Perth went backwards in the three months to December, falling 1.9 per cent to a median of $465,000.

Over the 12 months to end December 2010, Perth home values shed 2.3 per cent, while median house prices across all capital cities for the year were up 4.7 per cent, the report said.

Official numbers released by the Australian Bureau of Statistics confirmed Perth’s established housing values were slipping while the rest of Australia’s were growing slightly.

Perth’s established housing market was the only market in the nation to have lost value, according to the ABS, falling 3.2 per cent over the December quarter, while across the nation growth was relatively flat, at 0.7 per cent.

Vacant land hasn’t fared much better out west, with the number of lots sold in the December quarter dropping 27 per cent on the previous corresponding period.

Sales data collected in the Urban Development Institute of Australia and Colliers International’s Urban Development Index showed 1,274 lots were sold in the three months to December 31, compared with 1,747 the previous quarter.

The average price of lots fell 2.7 per cent in the December quarter.

UDIA chief executive Debra Goostrey said in comparison to the established housing market, where median values have fallen 2.3 per cent during the past year, the vacant land market had been relatively steady.

“The land market was holding on for most of the year with sales up in the March and June quarters,” she said.

“But these latest figures show that after six interest rate hikes the RBA has well and truly quashed consumer confidence right across the property market.”

Colliers International research manager Samantha Titterington said the lack of consumer confidence did not reflect WA’s economic situation, with historically high iron ore prices and export levels, and mining sector employment figures currently sitting above pre-GFC levels.

“With falling general unemployment and massive investment in the resources sector, this downturn in consumer confidence can be correlated to the rapid rises in interest rates and tighter banking sector credit controls,” Ms Titterington said.

Ms Goostrey said the UDIA would call on the Reserve Bank to hold back on raising interest rates for at least the next six months.

“The floods in Queensland and potential new federal government levy all add to uncertainty about the Australian economy,” she said.

“We need stability from the RBA to ensure people have the confidence to jump back into the property market.”