New demand in the Perth’s property market is pushing up prices in the lower end of the market and further reducing stock in the capital city.
With currently two to three months of stock left in Perth, Gavin Hegney, director of Hegney Property Group, told Smart Property Investment that first home buyers are competing against each other in the cheaper end of the market.
“We are experiencing new demand from first home buyers who are predominantly moving out of the family home; they’ve saved up their deposits and now they’re starting to buy,” Mr Hegney said.
“Not all lower priced buyers are first homer buyers, but in the cheaper end, it may be half to three quarters of the buyers."
While Mr Hegney doesn’t see the property market returning to peak levels during the property boom, he said a rise in house prices will see more properties come onto the market.
“Looking back, the amount of housing stock available in 2011 peaked because people were nervous about buying, and hence, was opting to rent. The fear was due to the uncertain international economies, like Greece and China. Last year those fears were mostly addressed and buyer demand started to shift.”
“At the peak of the boom we had one month worth of stock on the market, peak global financial crisis was 10 months, today, it’s two months.”
According to the Real Estate Institute of Western Australia (REIWA), property listings in Perth fell by more than 30 per cent over the 12 month period ending December 2012.