Price growth warning as housing glut hits early
WA's slowing economy and a flood of new high-density developments have pushed Perth's housing market into oversupply.
The number of Perth properties listed for sale is up by more than 2000 since the start of the year to 14,000-plus, while sales are down 15 per cent from the same time last year.
The number of properties advertised for rent has also continued to rise, up 210 per cent in three years to 6500, according to Real Estate Institute of WA figures to be released today.
The tip into oversupply had been predicted but came sooner than some experts had expected.
REIWA is forecasting negligible price growth in 2015.
REIWA president David Airey said the number of new properties that had come on to the market post-Christmas holidays was "pretty significant".
He said rising unemployment, slowing population growth and a drift among first-homebuyers towards building homes rather than buying established ones were contributing to the trend.
Another major factor was the number of new multi-residential developments being completed.
"It's not just that everyone's selling, it's that we are getting fed into the market a very high number of units and apartments that are coming on-stream," he said. Perth's median house price fell $5000 to $547,000 last month. Metropolitan rents were unchanged at $440 a week.
"With this large supply of homes for sale and rent, it's likely we will see negligible price growth across 2015 and a fairly slow market for those selling property or looking for tenants," Mr Airey said.
He said sales had slowed faster than anticipated but he saw it as a period of consolidation.
"Over the last four years the bottom of the market was in September 2011," he said.
"People are calling the end of the world since the market slowed. The reality is that in that period the median price has risen by $90,000, which is 19.5 per cent.
"So we have had a growth market. It's just been very slow and now we're seeing a slowing down in line with the West Australian economy. We're not calling it doom and gloom."
'With this large supply of homes for sale and rent, it's likely we will see negligible price growth across 2015.' " *REIWA president David Airey *
