House prices in Perth are growing faster than they did during the previous market growth cycle, according to the Real Estate Institute of Western Australia (REIWA).
The current recovery in Perth's housing market has put the average growth rate at 0.9%, nearly double the 0.5% increase recorded during the growth cycle that lasted from 2011 to 2014.
During the previous growth cycle that lasted 30 months, house prices in the WA capital grew by 15%. The current growth cycle appears to be on track to eclipse this growth.
REIWA president Damian Collins said 12 months into the current growth cycle, prices have already gone up by 11%, with the bulk of the growth happening in the first six months of the year.
“For comparison, the total price growth recorded during the first 12 months of the previous upcycle was 6%,” he said.
Winter slowdown
A common trend in both growth cycles was the short period of moderation during winter. Over the past two months, Perth's growth rate tapered to 0.2% in June but went up slightly to 0.3% in July.
The same trend happened in June 2012 when the growth rate dropped to 0.2% before picking up towards the end of the year.
"That growth cycle continued for a further 24 months following June 2012, which sets a good precedent for why we shouldn’t read too much into winter slowdowns," Mr Collins said.
The slowdown has persisted over the past week as sales activity declined by 11%. During the period, sales dropped across all segments, down by 10% for houses, 8% for units, and 18% for vacant land.
Mr Collins believes that opportunities for further price gains are rife in Perth's housing market given the low listing stock and the still increasing demand from buyers.
"Once we move into the spring selling season and the warmer weather descends, we expect that the Perth market recovery will start to accelerate again," he said.
Faster selling days, tighter listings
Despite the deceleration in Perth's house-price growth, other market indicators remained robust, according to REIWA’s July figures.
In fact, there was a decline in overall residential property listings over the month, driven by houses. Banksia Grove, Lockridge, Darlington, Glendalough, and Helena Valley reported substantial decreases in listings.
The median time to sell a property also remained short in July at 17 days. While this is one day slower than in June, the median selling time for the month was still 27 days faster than it was a year ago.
Kingsley was the fastest-selling suburb, with houses only taking an average of six days to sell. Selling period also decreased to seven days in Willetton, eight days in Heathridge, Kinross, and Palmyra, nine days in Waikiki, and 10 days in Greenwood, Leeming, Hocking, and North Perth.
