Talk of a correction to Perth's housing market is exaggerated, due to a lack an understanding of how the property market works in Western Australia, according to the Property Council of Australia.
Talk of a correction to Perth's housing market is exaggerated, due to a lack an understanding of how the property market works in Western Australia, according to the Property Council of Australia.
The full text of a Property Council announcement is pasted below
Claims that Perth's housing market is facing a significant correction are exaggerated and lack an understanding of how the property market works in Western Australia, according to the Property Council of Australia.
"Reports projecting a significant weakening in the State's housing market following the boom are further examples of external commentators failing to understand the underlying strength of WA's economy and its property market, said Lino Iacomella, Manager of Policy and Communications at the Property Council in WA.
"Property values have risen in WA in recent years because of:
- housing shortages in key sectors;
- land supply constraints in high demand locations;
- a younger population that boosts the first home buyer sector;
- significant increases in household incomes, which fuel a healthy trade-up market;
- a surge in high income households seeking secure long-term investments in property;
- high levels of consumer confidence in WA's long-term economic prospects; and
- high levels of foreign investment in the WA's residential property market.
"All of these factors are still operating in WA and will continue to sustain the housing market into the future.
"The rapid growth in house prices in recent years have created an affordability problem in specific sectors, which will lead to a slowing in growth of property values. However this is normal market behaviour and we expect that affected sectors will experience a flattening in growth for a period before growth returns, in a similar fashion to comparable markets like Brisbane.
"The median house price in Brisbane doubled between 2000 and 2003, it steadied in 2004 and 2005, and in 2007 it is 15% higher than the 2003 peak.
"Perth and regional WA is made up of many submarkets in residential real estate, which are reacting differently after the boom. Quality properties that are well located continue to experience steady growth in values in 2007.
"However, in order to truly fix the affordability problem it is important that Governments continue to reduce the State's excessive taxation of property and loosen up the red-tape that is holding up new housing developments.
"We expect the overall housing market in WA to stabilize over the near future, however the strong market fundamentals will sustain continued growth over the longer term", said Mr Iacomella
