Perth House Prices Stable Despite Covid-19
House prices remained stable over April and selling agents are reporting renewed interest in the form of more phone enquiries and viewings, giving us a promising start to May.
This boost in the spirits of West Australians comes about from the lifting of restrictions and good performance in containing the Covid-19 spread, but we are a long way off returning to normal.
Sales volumes and values
A few weeks back the country was gripped by panic and uncertainty. Buyers put home and investment plans on hold and sellers pulled properties from the market.
People were uncertain where the Covid-19 pandemic was headed from and economic, employment and health standpoint and how this would affect our lives in the future.
And when there is uncertainty, many people put their property plans on hold. This is seen, for example, in the period leading up to an election or for many big events where the outcome is uncertain.
As a result, sales volumes plummeted 40% in April and some people felt property prices might plunge.
However, despite this drop in sales volume Perth property prices remained stable in April.
CoreLogic Hedonic Home Value Index was up 0.2 per cent for the month, making it the sixth month in a row to see the Perth house price value increase or stabilise.
One of the good things that’s helped support the market was sellers not flooding the market with listings, but rather the opposite.
Listings are down to 11,903, from 12,582 previous week and 16,934 for the same time last year.
This helps keeps the market in balance. Having too many properties available for the number of buyers drives prices down and that’s not good for buyers or sellers.
That’s not to say there won’t be any bargains for buyers willing to scour the market, but we are not yet seeing sellers feeling they must accept the bargain-hunters’ lowball prices.
Home opens are back
With the lifting of restrictions on home opens and allowing 10 people at a time to visit a home, more buyers are now able to view and this is a positive move for the market.
But as the coronavirus crisis is not over, buyers could do more thorough initial searching on the internet to minimise risks of contact when attending a home open with others.
This is where buyers’ agents can be of great value with their expertise in assessing properties to arrive at a shortlist that’s on target.
Buyer’s agents also have access to data to help eliminate properties not right for the brief, but which the average buyer might go out and view unnecessarily.
Rentals held fairly steady in April and are much improved over last year. 48% more properties were leased last week compared with same time last year and there were a third more properties available for lease this time last year.
Although many people are out of work and struggling financially, according to REIWA most tenants are still meeting their rental obligations. The government’s packages have helped to soften the blow of Covid-19 unemployment for some tenants.
It is still too early to tell where the market is heading. It depends very much on how long it takes to come out of the pandemic crisis.
It appears Western Australia has done really well so far with containment of the virus and there is a renewed confidence that the economic shut-down won’t last as long as expected.
Tips for buyers
For homebuyers, finding the right home is what it’s all about and then negotiating the best possible deal in whatever market you’re in. Your home is where you spend your life and the best home within your budget will give you more than a bargain that you’re unhappy to live in.
For investors, ensure you’re finance-ready to grab opportunities when they present. Interest rates are at their lowest and those who are prepared will be the winners.
If you have any questions about the Perth property market, please call us on 08·9381·7450 or enquire here.
To learn more about buying property safely in the current environment, please enquire on our Covid-19 safe buying page.
If you’d like to enquire about finance, call us on 08·9381·7450 or download our Finance Services information.
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We can help you unlock the potential of the real estate market for your family through savvy property selection, and negotiation.
Regardless of market conditions, our research, local knowledge, and access to silent sales means we find the ‘hidden gems’ that can outperform the market in capital growth and rental returns for long term wealth creation. Importantly, we’re able to provide property investors and homebuyers with the same level of representation that property sellers have benefited from for years.
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