Source : the age
New data has laid bare the impact of a national housing downturn, with home values in Perth dropping by 3.2 per cent over the last quarter, according to Cotality.
The research group’s latest Home Value Index, released on Tuesday, revealed Beaconsfield, Jane Brook and Southern River topped the list of suburbs that saw the greatest property value drops from May to August.
However, real estate agents say the data doesn’t reflect the situation they see on the ground.
Cotality executive research director Tim Lawless said this was the fourth month that property values had slowly declined.
“In the last five years, we’ve seen housing values across Perth up about 80 per cent, and if you include the last six years, they’ve more than doubled,” Lawless said.
“So I think this was inevitable, despite the fact that there were some headwinds from higher interest rates, and low sentiment, and a sharp pullback in investments, this downturn was inevitable.”
Cotality bases its WA market research on Landgate data, which helps determine the group’s Home Value Index.
The index measures the movements in the value of Australian housing markets using a methodology combining transacted sale prices, as well as land area, geographical location, and the number of bedrooms and bathrooms in a property.
Lawless said the property value drops reported in WA were “pretty broad-based” and not suburb-specific.
“We’re seeing the majority of Perth suburbs are declining in value now,” he said.
“So there’s a broad-based pattern where we’re seeing housing values trending lower. Across Perth, 97 per cent of suburbs were down in value over the past three months.
“But when you look at that list, there’s a whole bunch of different suburbs in here, and some are quite expensive.
“Beaconsfield’s got a median dwelling value of $1.4 million, Swanbourne has a median of $2.6 million, and getting down to some of the more affordable areas, [there are suburbs] around Kwinana, or getting out to Gosnells.”
The 3 per cent of suburbs in Perth that resisted the property value drops were concentrated in more affluent regions of the city.
“The areas where we’re actually seeing values rising, they do seem to have a predominance of the fairly expensive markets,” Lawless said.
“So you’ve got Dalkeith, for example, a 3.4 per cent rise over the past three months, as well as Peppermint Grove – they’re two of Perth’s most expensive markets.”
Lawless said these suburbs tended to be more resilient to property trends.
“There really does seem to be a theme in this list where if you went back, say 12 months ago, a lot of these really high-end suburbs were generally in the middle to lower end of the pack in terms of the rate of growth,” he said.
“But it does seem like they are a lot more insulated or resilient to value falls as the market moves through this downturn, which probably speaks to simply the fact that I think home owners or prospective buyers at that ultra-high end of the market are probably less sensitive to things like affordability challenges and changes in interest rates.”
Coming in at number six on the list for suburbs that saw property values fall was Hilton, on the outskirts of Fremantle, where the Cotality index reported a 5.3 per cent reduction in values over the last three months.
But C&CO Real Estate director Lauri Curtain, whose office sits in the heart of the suburbs, said there had been no sign of prices declining.
“To hear [there was a] 5 per cent is actually amazing. We had a property that we listed a few weeks ago at 2A Howson Street, and the price guide was offers from $1.15 million, and it’s now in an unconditional pending settlement for $1.235 million,” she said.
“Then I sold 12A Collick Street which was asking $1.15 million, and I sold it for $1.15 million.
“So in our office, we certainly haven’t had any properties selling below the price guide.”
Curtain said the recorded value drop could be linked to agents overpricing their homes and having to reduce to the more standard pricing for a property of its value.
“If something comes on, and it’s overpriced, buyers are going to look past that property and wait for something else to come on, because there’s more stock coming on,” she said.
White House Property Partners advisor Connie Handcock also said prices haven’t been impacted at her agency, which is based in East Fremantle.
“The market has calmed down, there’s no doubt. However, the prices haven’t really been impacted greatly, it’s just they’re taking longer to sell,” she said.
“Instead of selling on the first weekend, we may have to open it maybe three, four weekends before we get a result that’s acceptable to the seller.
“If there has been a shift, it’s very slight and personally, I think they were probably a little inflated because of the frenzy initially, so they’ve calmed down and probably come back to where they should be.”
Ray White property consultant Marisa Rifici said she had not noticed a reduction in property prices in Beaconsfield either, but acknowledged prices across Perth did seem to be heading in a downward trajectory.
“I think we’ve still got a shortage of homes, but I haven’t necessarily noticed that the prices have dropped dramatically in Beaconsfield,” she said.
“We’re definitely not seeing the fear of missing out, which we were seeing earlier on in the year too.”
Lawless said it looked like it could be the beginning of a downturn in property prices in WA.
“I think this is early days for this housing downturn, including Perth,” he said.
“Normally markets do have some momentum, so the fact that we’ve only entered this downturn over the past four months, I think probably suggests, at least on a historical level, we probably have some way to go.”
