Prestige Perth suburbs lacking confidence

Prestige Perth suburbs lacking confidence

by 1 comments

A lack of confidence in the Western Australian real estate market is stifling growth in Perth's wealthier suburbs, says WA's peak industry body.

Real Estate Institute of WA president David Airey said the annual growth rates of five to 10 per cent are a thing of the past in affluent areas.

“Anyone who purchased a new apartment in Claremont or Leighton in recent years can tell you that not only has there been no growth, but most of the original off-the-plan buyers face losses of 10 to 20 per cent in resale under current conditions,” Mr Airey said.

With inflation under control and interest rates staying low, Mr Airey said buyers and sellers were dealing with a very different market than they did in the 1990s and 2000s.

“Stable inflation and low interest rates are two factors which drive prices up, and it seems to me that we’re living in a new environment with low growth and people moving less than they used to,” he said.

“Anecdotal evidence of sales in older suburbs, such as Dalkeith, Subiaco and Nedlands, suggests that the majority are sold due to downsizing or death. Very few sales are from people selling to buy bigger and better.

“People like me who have built a house are saying, ‘You can carry me out of this in a box, I'm never moving’, and that’s become a big factor in this area,” he added.  

Mr Airey said he believes if the market remains slow with low growth cycles, fewer sales and less moving, it will lead to an increase in available housing stock and average selling days.

“I suspect we are starting to see the impact of this now. I wouldn’t be surprised to see the average time on market blow out from 60 to 90 days, particularly in the western suburbs.”

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
How this agent grew his database by 50% in five years

In this episode of Secrets of the Top 100 Agents, Robert Pignataro joins host Tim Neary to explain how he increased his personal database by...

View all podcasts

Does the benefit of being part of a branded group outweigh the cost?

Depends on the group
Do you have an industry update?