December 2016 quarterly data from REIWA on Perth house prices has many thinking the decline in value may have come to an end. Hayden Groves, President of REIWA says, “while it’s too early to make a definitive call that the bottom of the real estate market has arrived, the figures reveal several encouraging indicators”.
Our reading of the data leads us at Stage Property to suggest that the market has bottomed and is already showing signs of beginning to move up.
The median house price was unchanged in the period Sept-Dec 2016 and is near the previous lows in early 2013 prior to the upward movement to a peak in Dec’13 at $550,000. When this is viewed in context with long term data for Perth house prices (figure 1) it is clear the current values are below the long term trend. Time prices have spent below the long term trend are usually short before an upward movement is seen.
Figure 1: Historical Perth House Price
Data: REIWA modified
The recent stabilisation of the median price is also accompanied with an increase in the number of suburbs showing an increase in price in the last 12 months to Dec’16 and in the Dec 16 quarter. The table shows a significant move toward increased price in more suburbs over the last 3 months compared to 6 months ago.
Number of suburbs
Positive yearly growth
Positive quarterly growth
Positive for either growth
Given the figures show a strong indication that the market is changing, now is the best time to act rather than wait for the recovery to be clearly underway.
Stage Property has a range of property across Perth; house and land, finished new villas and houses, off the plan apartments and second-hand.
Dr Ray Wallis Investment Consultant -BSc, PhD, MEngSc
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