PERTH MARKET RECOVERING
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.