Slow property price growth ahead for WA
The West Australian residential market remains in the midst of a slowdown punctuated by falling levels of buyer activity, according to the latest Residential MarketView report from CBRE.
CBRE global research and consulting manager Sam Reilly said buyer sentiment was the biggest issue at present, with owner occupiers and investors alike concerned by the uncertain global economic outlook.
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"We are seeing rapidly increasing levels of saving, with people less inclined to enter into large purchases in the current circumstances," Mr Reilly said.
According to CBRE's report, retirees and wealthy professionals are increasingly less active in the Perth residential market.
CBRE director, valuations and advisory services, Michael Veletta said economic volatility has particularly affected retirees, with this sector of the community seeing superannuation benefits diminish.
"These reductions in personal wealth are immediately reducing the capacity of individuals to participate in buying opportunities in the residential market which is placing further downward pressure on values," Mr Veletta said.
Similarly, the south west region is experiencing very low levels of demand due to the absence of wealthy professionals further investing in these markets.
"In the past, such buyers were active in this area with lifestyle and tourism markets thriving. The trend of purchasing holiday accommodation in the south west has now slowed considerably, and a large surplus of stock now exists, together with a slowing toursim market has impacted on most sectors of the South West " Mr Veletta said.
Further evidence of this slowdown can be seen in the middle and upper price brackets across the state, with Mandurah and Busselton under particular pressure.
In such areas, realistic pricing is paramount to sales being completed, according to CBRE's report, which shows vendors are slowly correcting to new pricing structures that buyers are able to negotiate from.
Despite recent speculation that Western Australia is set for a period of high growth, Mr Reilly conceded an immediate recovery was not likely.
"Further data would need to support a "bottoming out" of market falls before such predictions are realistic," Mr Reilly said.
