Perth property sales have hit levels not seen since 2010 on the back of strong buyer demand.
In April, the median selling time for homes was 13 days, while the volume of listings were one per cent higher than March and 11 per cent lower than April last year.
Mack Hall Sales Real Estate in association with Knight Frank Executive Greg Williams said a high sales volume and low property listings would result in a continuation of supply shortages, which had driven the market since the end of 2020.
“Low supply and stable demand means happy sellers,” he said.
“At present, property is a much more liquid asset than it normally is, and buyers therefore need to make decisions quickly to avoid missing out.”
REIWA President Damian Collins said the market was about demand and supply.
“A balanced market is around about 12,000-13,000 properties available for sale across Perth,” he said.
“Right now, we are sitting around 8000 properties, which fluctuates slightly week to week.
“There are simply not enough properties available to meet market demand.”
Despite low numbers of property available, Mr Collins said sales volumes were up and consistently reaching around 1000 properties a week.
“These are quite solid numbers,” he said.
“In 2018 and 2019, it was regularly 600 properties a week, we are seeing not much stock available.
“As soon as anything good comes to market, it sells very quickly.”
Western Australia has strong employment rates, with Australian Bureau of Statistics’ data showing the unemployment rate is at an all-time low of 2.9 per cent. This, combined with strong economic growth and relatively low interest rates, has led to increased demand.
Mr Williams said sales volume would continue to increase depending on the macroeconomic drivers on the demand side of the equation.
“If demand remains solid, then sales volumes should continue to be strong,” he said.
“Uncertainty surrounding political stability and interest rate settings can change demand.”
Mr Collins said interest rates had not dampened the market.
“Agents I have spoken to have reported that the demand is higher because people want to get a property locked away before rates get too high,” he said.
Another contributing factor that may drive demand is the open borders and eased restrictions, after WA’s long stint shut off from the world during the height of the COVID-19 pandemic.
“At some stage this year, we will start to see more migrants coming in for jobs,” Mr Collins said.
“Although it is going to be harder to get people here than it used to be, this population growth will continue to fuel demand.”
According to Mr Collins, WA is the cheapest state in the country for housing – around 25-30 per cent lower than Brisbane and Melbourne, and 15 per cent lower than Adelaide.
“Our national body does affordability studies, and the last report stated that in WA an average of 26.2 per cent of income goes on a mortgage,” he said.
“In New South Wales that is over 44 per cent, so we were the cheapest of any major state.”
Mr Collins said REIWA was expecting a continued price increase over the rest of the year.
“We are forecasting the 2022 calendar year to grow 10 per cent, and that is looking to be on track,” he said.
Mr Williams said most of the commentary surrounding interest rates was focused upon the levels of household debt to income ratios on the eastern seaboard, which was different to WA.
“Not all buyers take this into account, most are slightly cautious,” he said.
“Even after the recent increase, the Reserve Bank of Australia’s cash rate is a minus 0.35 per cent.
“When rates slowly adjust, it will only be towards normal from close to non-existent.
“It would be a worse sign if the economy needed such low rates ad-infinitum. I would rather see signs of inflation than deflation any day. ”