Following on from our recent post "Will it be a soft landing or a dull thud?" further evidence about the state of the Perth/WA property market is emerging from the number of listings for sale on aussiehome.com:

- the total number of properties for sale peaked in October 2008 (7,929 were shown for sale on aussiehome.com that week)

- the total number of for sale listings hit a trough in February 2010 (4,428)

- this week we have 5,902 for sale (a rise of 12% off the bottom in 3 months)

- the total number of agencies that were on aussiehome.com during this time has remained fairly constant; with the number of listings per client averaging 41 (it is now at 48)

This 'half cyle' (from one peak to the next trough) measures 16 months in duration, suggesting a full cycle (one peak to another peak, or one trough to another trough) of 32 months (or 2 years 8 months) which is probably shorter than many of us would expect. So are we experiencing a "boomlet" snuffed out by the threat of higher interest rates, or price pressure? Maybe both.

With prices now almost back to what they were at the top of the last boom (December 2007's peak median price for Perth was $465,000; December 2009 data had the median price already back at $453,000), it would appear we have experienced a quick recovery from what was quite a rude shock, and things may go sideways for a while. A return to the 'Normal Market" we were all talking about in mid 2009?

Time will tell, but with interest rates strongly tipped to rise this week due to inflationary pressures, and some homeloaners already feeling the pinch, plus the increased amount of stock around, this could be a great time to buy. (There's always a silver lining.)

Perth’s median house price is likely to pass the $500,000 mark in the March quarter as sellers and buyers gain confidence in the market.

That's the news from Real Estate Institute of WA President, Alan Bourke.

According to Mr Bourke the Institute is showing 12,700 properties for sale in Perth at the end of March - a 22 per cent increase on the December figure.

“This includes around 2,060 blocks of land, which is significantly more than some other recent reports on lot supply have suggested,” he said.

Mr Bourke said the increase in listings reflected a growing confidence in the WA property market, with buyers and sellers feeling that the worst of the global financial crisis is now behind them.

“The Perth median house price is very likely to top $500,000 for the first time when official figures are released in early May. REIWA’s internal data from sales by its members is already showing that we have reached this level".

The rise in the median price continues to be fuelled by a shift in the market to higher priced property, as the sales of homes under $400,000 subside.

“There has been a dramatic fall in First Home Owner Grant applications lodged with the Office of State Revenue in the first two months of 2010. This is largely because the Commonwealth has ended its temporary cash boost for first time buyers,” Mr Bourke said.

REIWA data show increased sales activity in the March Quarter in the $500,000 -$600,000 range, which is currently the strongest segment of the market.

“Here, the proportion of sales jumped 2.5 percentage points to represent about 18 per cent of the market, while the other price range to show increased activity for the quarter was in the $750,000 to $1m range,” Mr Bourke said.

REIWA data on rental properties show a seasonal increase in new tenancies during the March quarter with the vacancy rate tightening a little from 4.8 to 4.5 per cent for the three months to February. Mr Bourke said this data will be updated for the March quarter in coming weeks.

“We are not seeing any movement at this stage in the overall median rent of $370 per week recorded in December last year, however it seems that the median rent specifically for houses has risen by $5 to $380 per week.

“The median rent for units, apartments and villas has remained steady at $350 per week,” Mr Bourke said. 

First home buyers in Western Australia tended to be younger than those in the eastern states, more likely to buy a brand new home and more likely to sacrifice other expenses in order to achieve it.

These and other findings were detailed last week following a survey of 509 first home buyers across Australia by brokers Mortgage Choice.

The survey also found that first home buyers in WA are the most independent property buyers in Australia, with 37 per cent planning to buy their first home on their own. This figure was 32 per cent nationally.

Real Estate Institute of WA President Alan Bourke said he was not surprised by the results, suggesting that our economy probably influenced the outcome.

“Employment tends to be stronger and salaries higher in WA, so this gives many younger people an earlier chance at home ownership,” Mr Bourke said.

West Australians were also the most likely to sacrifice other aspects of their lifestyle in order to buy a house and secure a mortgage.

Mr Bourke said this was a major turn around from last year, because in 2009 the same survey found that West Australian first home buyers were the least likely to sacrifice other aspects of their lifestyle.

“I think the stronger housing market and rising interest rates have nudged many first home buyers into a more serious and considered view of home ownership and the benefits of reducing the mortgage sooner,” Mr Bourke said.

The top three sacrifices nominated by first home buyers were cutting back on spending, missing out on a holiday and buying a less expensive home.

This week the Australian Bureau of Statistics revealed that the number of WA first home buyers fell by 30 per cent between December last year and January this year, equating to a drop in numbers from 1,835 to 1,254.

The ABS reports the average loan size for first home buyers across Australia in January was $302,000.

Mr Bourke said that this figure was likely to be higher in our state, with recent data from the Office of State Revenue showing that the median purchase price for first home buyers in WA was $418,500 in January.

“This is up by $48,500 on the same time last year, when first home buyers were purchasing in the median range of $370,000,” Mr Bourke said.