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Ex Dame Pansi
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Perth property still suffering
Yet more evidence has emerged about the sluggish nature of Perth's property market compared to the rest of the nation.
It's been bad, but just how bad? Yet more evidence has emerged about the depressed nature of Perth's property market.
A record run of falling prices, the state's real estate industry head saying the situation was "unprecedented", and a former government minister warning the McMansion was in danger of becoming unsaleable all emerged yesterday.
The comments added to the aura of gloom surrounding the industry, encapsulated in December when a prominent agent told WAtoday.com.au that the Perth market was going through its worst spell in 10 years.
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Real Estate Institute of WA president Alan Bourke told an Australian Property Institute forum yesterday that falls in median prices had wiped out any gains from the past three years and turnover had taken a hit - even as listings soared by more than 50 per cent in a year.
"We've had five quarters of decline in activity, and that's pretty much unprecedented," Mr Bourke said.
"This time we aren't going to get any interest rate subsidies (referring to the federal governments stimulus package and falling rates after the global financial crisis hit) so it will be interesting to see what prices do over the next 12 months."
However, as the rental vacancy rate started to tighten - it had already gone from 4.5 per cent to 3.5 per cent and he expected it to be 2.5 per cent by March - there could be a bright side for investors.
"If that's the case we could see rentals rise. There is competition for tenants again and we haven't seen that for about 18 months or so... that may be the catalyst for improvement in the market."
Higher rentals could also see tenants seriously consider buying their own homes, Mr Bourke said.
Stats expose a dire market
His comments come as more official evidence emerged yesterday about the sluggish nature of Perth's property market compared to the rest of the nation.
The Australian Bureau of Statistics monthly house price index for the three months to December, showed a fall of 3.2 per cent. The index was also 2 per cent lower than the same quarter in 2009.
Perth was the only state capital to record a fall in either category.
The quarterly fall was the largest such drop since the ABS began compiling the index in 2002.
It was also the third consecutive quarterly fall, after the September figure was revised from a 0.4 per cent rise to a 1.8 per cent drop.
Most of the drop was attributed to the fall in value of properties priced below $1 million.
The ABS statistics are represented by an index, not a price figure. The index now stands at 198, the lowest figure since September 2009.
On Monday, property analysts RP Data and Rismark International said the median price for a dwelling in the city fell 0.9 per cent for November and 2.3 per cent for the year, to $465,000.
While house prices fell, the majority of the overall fall was due to a decrease in value of units.
End of the McMansion
Former state planning minister Alannah MacTiernan told the API forum that the four-bedroom, two-bathroom McMansion risked becoming unsaleable, thanks to demographic changes.
"You talk to young couples in outer suburbs, not on a big income, and you ask why they want a four-by-two when it's only the two of them," she said.
"They say they have been told it is about resale value and that you can't sell a three-by-one. The market in the future is going to consist of smaller and smaller households and we may find that the four-by-two... turns out to be a lemon."
Demographic projections showed families with children, at present about one-third of households, would fall to one-quarter by 2029, while singles and couples would make up 60 per cent of the market.
"The four-by-two, in the volumes that we are building them, does not match household formation," Ms MacTiernan said.
While the WA appetite was for larger home sizes, they should be designed in such a way that they could easily be split into two or three in line with a return to "intergenerational living".
A property developer told the forum there were signs house prices had plateaued in recent years.
Cedar Woods managing director Paul Sadlier said the market had to be shown that smaller could be better.
"We need to make 'mini-mansions' more fashionable and we need to make the case for infill development and showcase the better examples that are around."
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