PERTH MAR­KET RE­COV­ER­ING

Kalamunda Reporter - - Residential -

THE Perth prop­erty mar­ket is in re­cov­ery mode and tipped to draw buy­ers back, ac­cord­ing to a new re­port.

Res­i­den­tial Prop­erty Spot­light: Perth, com­piled by prop­erty in­vest­ment con­sul­tancy Mo­men­tum Wealth, an­a­lysed the key de­mand and sup­ply in­di­ca­tors in­flu­enc­ing prop­erty prices.

It con­cluded the worst was be­hind the mar­ket fol­low­ing a three-year cycli­cal down­turn where sup­ply out­weighed de­mand amid record-high hous­ing con­struc­tion and slower pop­u­la­tion growth.

Mo­men­tum Wealth man­ag­ing di­rec­tor Damian Collins said sup­ply and de­mand were start­ing to re­bal­ance, which would help buoy prop­erty prices go­ing for­ward.

“On the sup­ply side, the re­port shows that the num­ber of prop­er­ties for sale has hit a two-year low.

“Mean­while, the amount of new prop­er­ties be­ing built has re­turned to av­er­age lev­els af­ter dwelling starts hit a record high in 2015,” he said.

“Af­ter three years of an im­bal­ance, this tight­en­ing of hous­ing stock will al­low de­mand to catch up to sup­ply and sub­se­quently will help un­der­pin prop­erty price growth go­ing for­ward.”

The record-high hous­ing con­struc­tion in 2015 was driven by favourable gov­ern­ment in­cen­tives for first-home buy­ers to build rather than buy es­tab­lished stock, while de­mand was weaker fol­low­ing slower pop­u­la­tion growth in the af­ter­math of the re­sources con­struc­tion boom.

The re­port said this cre­ated a sig­nif­i­cant im­bal­ance, with sup­ply out­weigh­ing de­mand, but this was now start­ing to equalise.

In ad­di­tion to the im­prov­ing sup­ply­side fun­da­men­tals, there were also in­creas­ingly favourable signs on the de­mand side.

Damian Collins.

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