Perth's house prices up 4.5 per cent, market slows

Perth's median house price has risen to $460,000 in the last three months of 2006, up 4.5 per cent, representing a dramatic slow down compared to the rest of the year.
The figures, released by the Real Estate Institute of Western Australia, showed that listings were on the rise, indicating that significant heat had been taken out of the market.
"The growth rate of 4.5 per cent, while still very robust, is down from the rate of 8.6 per cent in the (previous) September quarter," REIWA president Rob Druitt said in a statement.
Population growth and the strength of the resources boom-fuelled economy were continuing to put upward pressure on prices, REIWA warned.
"REIWA anticipates further modest growth throughout 2007, which will see affordability become even more of an issue for many people trying to enter the market."
The REIWA sales figures news follows other evidence of a slowdown. Loans to first home buyers also fell, going down about 16 per cent in the three months to November.
"Clearly the absence of first home buyers underpinning the market is having a flow-on effect reflected in the increased stock of listings and fall in sales volume," he said.

The full text of a REIWA announcement is pasted below

Perth's preliminary median house price reached $460,000 in the December quarter 2006, according to figures released today by the Real Estate Institute of Western Australia.

This represents growth of 4.5 per cent during the December quarter, lifting the median price by $20,000 in the last three months of last year.

REIWA President Mr Rob Druitt, said the REIWA.com House Price Measure showed that while prices were increasing, the rate of growth had slowed.

"The growth rate of 4.5 per cent while still very robust, is down from the rate of 8.6 per cent in the September quarter," Mr Druitt said.

Mr Druitt said population growth and a strong economy was continuing to place pressure on prices and rentals.

REIWA data also shows that the number of sales in Metropolitan Perth had dropped by 15 per cent in the December quarter and the housing stock available for sale had jumped. The average number of selling days has risen from 32 days in the September quarter to 47, in line with the long-term average.

"The number of listings for sale in Perth has jumped by 29 per cent, bringing current stock to 11,400 dwellings. This is up from 8,800 at the end of the September quarter," Mr Druitt said.

"Essentially the market is returning to its normal settings after the hectic times of the last two years".

Increasing house prices have also seen a rise in median rents.

Analysis by REIWA shows that median rent for a house in metropolitan Perth has risen by 3.8 per cent in the December quarter to reach $270 per week. Rents for units have grown by 4.2 per cent to $250 per week, making the overall median rental for Perth $260 per week.

Mr Druitt said that the latest finance data from the Australian Bureau of Statistics released yesterday showed a 13 per cent fall in overall finance approvals in the last 3 months, with loans for established properties, excluding refinancing, falling 18 per cent over the same period.

"It is very concerning that first home buyer loans continue to fall even more quickly, with a further 16 per cent drop in such loans in the three months to November on the back of the 10 per cent fall in the previous period.

"Clearly the absence of first home buyers underpinning the market is having a flow-on effect reflected in the increased stock of listings and fall in sales volume," Mr Druitt said.

"While the Perth market is slowing, the reality is that prices continued to climb in the December quarter on the back of our strong local economy and demand for housing.

"REIWA anticipates further modest growth throughout 2007, which will see affordability become even more of an issue for many people trying to enter the market.

"Once again we call on the State Government to bring about some urgent stamp duty relief, particularly for first home buyers," Mr Druitt said.