14/01/2009 - 13:55

WA housing market to fall further

14/01/2009 - 13:55

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Western Australia's housing market has yet to bottom out with the market forecast to fall by up to 7 per cent this year as mortgage commitments in the state decline by nearly 6 per cent in November.

WA housing market to fall further

Western Australia's housing market has yet to bottom out with the market forecast to fall by up to 7 per cent this year as mortgage commitments in the state decline by nearly 6 per cent in November.

According to latest data from research firm Residex, WA's property market is expected to record the largest negative growth as compared to other states and territories.

Residex chief executive John Edwards told WA Business News that the WA market is forecast to bottom out towards the end of this year.

Over the 2008 calendar year, the median house value in Perth fell some 4 per cent to $481,500. This compared to a 2.15 per cent increase recorded in 2007.

However according to the Real Estate Institute of WA, the median house value fell 11 per cent over 2008 to $418,000.

REIWA said overall sales volumes were largely static but increase in the first home buyer areas.

"The further decline in median price is largely attributed to the growing share of first home buyer activity pushing cheaper property sales, with homes valued between $250,00 and $450,000 experiencing a 5 percentage point increase in share of sales in the December quarter," REIWA deputy president David Airey said.

"Conversely, sales of homes in the $600,000 to $1 million range have fallen, shedding 5 percentage points of market share since September."

Residex added that the median house value of units in Perth during 2008 was down 1.3 per cent $377,500 while house sales in 2008 fell 13.28 per cent to 25,006.

Sales for units dropped 13.45 per cent to 5793.

Meantime, the median house value in regional areas climbed 8.68 per cent during 2008 to $411,000, lower than the previous year's growth of 13.32 per cent, according to Residex.

The median unit values in the country climbed 1.14 per cent to $309,500.

House sales in the country dropped 19.46 per cent to 5688 while unit sales fell 17.08 per cent to 602.

Mr Edwards said 2010 will be a risky period for the housing market, as the federal government implements its carbon pollution reduction scheme and interest rates could be on the rise.

"There may be some pressure on house prices," he said.

REIWA said the cost of renting a house in WA had risen by almost 6 per cent in the December quarter to a new median of $370 per week while units and apartment rentals grew by 3 per cent to a median of $350 per week.

The vacancy rate during the quarter returned to a "comfortable" 2.7 per cent, REIWA said.

Meanwhile, data from the Australian Bureau of Statistics showed the number of housing finance commitments for owner-occupiers nationally rose 1.3 per cent in November, seasonally adjusted.

This followed October's 1.4 per cent gain, which reversed eight consecutive monthly falls.

Housing finance commitments in WA fell 5.8 per cent during November to 5994.

The string of rate cuts late last year along with the government's increase of the first home owners grant has also driven the first home buyer share of the mortgage market to a seven-year high.

Nationally, 11,665 first-time borrowers made up 23.6 per cent of the home borrowing market, the highest proportion since January 2002 and increasing from October's 19.5 per cent share.

 

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