Title :Perth's March quarter median reaches $500k Created : 2010-05-11 16:33:34.0 Author Name :Communications 7 May 2010 Perth's median house price reached the half-million dollar mark in the March quarter, showing just over 3 per cent growth for this period and lifting the median by $15,000 from $485,000 in the December quarter. Real Estate Institute of Western Australia President Alan Bourke, said it was important to note that much of the rise in median price reflected compositional changes in the market and not necessarily increased values. "Trade-up buyers are now purchasing higher priced property and this is pulling up the median sale price. This was particularly evident during the March quarter with the retreat of first home buyers resulting in fewer sales of more affordable homes," Mr Bourke said. Mr Bourke said that while WA had returned to a more normal housing market with a reasonable balance between supply and demand, the collapse of first home buyers was having its effect across the entire housing system, particularly with the increase in stock for sale. Units, villas and townhouses in metropolitan Perth saw modest growth of 1 per cent, lifting their median price by $4,000 to $410,000. Mr Bourke said that REIWA's latest sales evidence for land purchases which have settled from the March quarter, indicate there has been a 20 per cent slow down in this market. However, he cautioned that this could not be confirmed for at least six months until pre-sold new lots are settled and the titles released. "REIWA's preliminary data is showing that the median land price for the March quarter is presently $275,000, but this is expected to moderate as pre-sold contracts settle. For example, our preliminary land data for the December quarter was showing a figure of $265,000, but this was subsequently revised to $235,000 once all the data was in. "Despite the expected overall fall in volume for the March quarter, current data shows an increased proportion of land sales above $250,000, which has contributed to the current high median price for lots," Mr Bourke said. Around 12,200 properties were bought and sold around WA during the quarter, which was down by about 400 sales from the previous quarter, however the stock of listings for sale in metropolitan Perth jumped by 22 per cent. "REIWA data show that there were 12,700 properties on the market at the end of March, up significantly from the 10,400 in the December quarter, and with the average number of selling days rising slightly to 57 days," Mr Bourke said. "Now that the Commonwealth boost for first home buyers has gone and interest rates have gone up, first home buyers have evaporated. Coupled with the fact that many first home buyers were pulled forward by the opportunity to use the grant, the more affordable end of the market has slowed greatly and stock levels have grown. "This dynamic may choke the housing system for a while, because without first home buyers active in the market, up-grade buyers are unable to relinquish their existing stock to them and move on. There is a chain reaction," Mr Bourke said. REIWA's seller sentiment guide, which measures the percentage of sellers who are willing to drop their price, and by how much, shows almost no change from the last quarter. "It's still the case that around 68 per cent of sellers will ultimately agree to a sale price which is 3.6 per cent under their initial asking price," Mr Bourke said. In regional WA, the median house price grew by almost 4 per cent to $395,000, while regional unit prices leapt by 17 per cent, or $45,000, to a new high of $365,000. "While we saw growth in units and houses throughout the state, land prices in the regions remains largely unchanged, with the median rising by just $1,000 to $161,000," Mr Bourke said. As REIWA reported in April, the vacancy rates for rental accommodation in Perth remains above average, although the rate has come down a little from 4.7 per cent in the December quarter to 4.1 per cent in the March quarter. "The median weekly rent across all flats, units, villas and houses in the metropolitan area remains steady at $370 per week, and hasn't changed for more than a year," Mr Bourke said.