Tough time for sellers
Although the drop in the housing market is good news for buyers, there are still many homeowners struggling to sell and taking big losses.
Real Estate Institute of WA figures show the median house price in the Karratha urban area is now $387,500, compared with $900,000 in 2012.
REIWA Karratha chairman and Ray White licensee Richard Naulls said with such a big drop, many sellers were losing $200,000 to $300,000.
Mr Naulls has also seen many mortgagee-in-possession sales.
“I’ve just worked out that in my office alone, it’s about 18 per cent of our listings are mortgagee in possession sales,” he said.
“You have to think, if that’s reflective in our office, it’s probably fairly similar in other offices and across the market in general.”
However, Mr Naulls said the market had stabilised and he advised sellers, if possible, to hold on to their properties until prices start to rise again.
“My advice (to sellers would be) if they don’t have to sell, try and hold on to it for at least — I think we’re going to be in this market for at least two years in a stabilisation pattern,” he said.
“If they can hold on and keep it, it would be more beneficial to them, but if they have to sell, unfortunately they may have to try to take the emotion out of it and go with what their head says, take what they can get and move on and make the most of not a great situation.”
The market shift has also taken a toll on the rental market, with prices dropping more than 60 per cent in the past few years since the boom.
Mr Naulls said renters were taking advantage of the drop by taking out longer leases to hold on to low rent prices.
“We’ve noticed in the last couple of months that there has been a stabilisation in prices and more and more people, renters, are taking longer leases of 12 months because they see that the prices probably aren’t going to drop any further,” he said.
“That’s the indication where the market has stabilised.
“Rents traditionally will move first and then sale prices follow.”
Although sellers are doing it tough in the current market, Mr Naulls said buyers had been given a good opportunity to snap up a bargain.
“I think the stats are showing that we’ve reached pretty much the bottom, if not already got to the bottom of the market,” he said.
“I think that we’ll stay in this sort of market in a stable market with some regular turnover of sales for at least two years.
“Then potentially we’ll start seeing some slight increases upwards in prices after that, which would be a more traditional real estate market.”
Many Kununurra owners are struggling to sell.