Rate cuts push housing recovery

Shane Wright, Canberra

Perth’s property market resurgence is continuing, with house values across the city jumping by 1.6 per cent through July.

In a clear sign that low interest rates are supporting the property market, RP Data-Rismark reported this morning that Perth house values have now jumped by 4.6 per cent over the past quarter.

So far this year Perth is the hottest capital city market with values up by 8.8 per cent. The national average is 5.2 per cent with Hobart (zero growth), Darwin (0.7 per cent) and Brisbane (one per cent) laggards.

The improvement in the house sector is rubbing off on the units sector with values in Perth up by 1.9 per cent in July to be 2.7 per cent higher so far this year.

RP research director Tim Lawless said despite overall prices up by 1.6 per cent last month the market was a mixed bag.

“The housing market is being buoyed by very positive conditions in Sydney, Perth and to a lesser extent Melbourne, with residential values in these cities now 3.7 per cent, 4.4 per cent and 2.4 per cent respectively higher over the past three months alone,” he said.

“At the other end of the scale you have cities like Adelaide, Brisbane and more recently Darwin where conditions are more sedate with dwelling values slipping lower over the past quarter.”

In another sign that the property market is improving, properties have for sale signs in the front yard for 45 days on average. This time last year the signs sat there for 59 days.

There has also been a reduction in the size of discounts being offered by vendors to secure a sale.

Rismark chief executive Ben Skilbeck said there had been a lift in investor interest in property.

A widely expected rate cut next week would also boost the sector but dull interest from first time buyers.

“While the highly anticipated interest rate cuts in August will further act to improve housing affordability, if these cuts do eventuate they will likely spur further house price appreciation making the deposit requirements for first home buyers more challenging,” he said.

Figures released this morning by the Real Estate Institute of WA shows average house prices in Perth fell in the three months to July, with the median house price $520,000.

The median house price is for REIWA sales. The RP Data-Rismark house value figure is based on all dwelling sales.

The latest market snapshot for the three months to July showed a one per cent fall in the June quarter median house price.

And sales turnover for the month of July itself showed a five per cent fall across Perth.

Softer sales were reported in several of Perth's expensive western suburbs market.

REIWA said the median rents in Perth remained stable at around $480 for a house and $455 for a unit, apartment or villa.