Perth property market shows signs of recovery
New figures suggest green shoots are appearing in Perth’s property market.
The latest CoreLogic RP data home value index figures show Perth property values spiked 1.7 per cent in the three months to the end of January, indicating short-term growth.
The Australian Bureau of Statistics (ABS) has also recently released its report on WA’s residential lending (excluding refinancing), showing a 0.1 per cent increase in November last year, following a long period of subdued activity.
According to Dr Andrew Wilson, group chief economist at Domain, the increase could be a sign the market has bottomed out and is finally on the rise.
‘This was the second consecutive monthly increase following three months of falls’, he said.
Consumer confidence rebounds across Australia
The report comes as consumer confidence in the national economy continues to rise. The latest ANZ-Roy Morgan figures, released on 15 February, show confidence rose two per cent to 113.6 in the preceding week, taking confidence back above its long run average.
The report’s authors said such a broad-based increase in confidence suggested consumers were ‘looking through the equity market weakness and shifting focus to domestic fundamentals’.
Consumers’ views towards the short-term economic outlook bounced 4.6 per cent and views towards the longer, five-year economic outlook rose 1.6 per cent.
Housing market benefits from confidence boost too
A national Westpac-Melbourne Institute Survey of Consumer Sentiment report, released in mid-January, showed that increase in confidence also applied directly to the property market.
It found that more people thought January was a better time to buy a home than at any time during the previous seven months.
There was a 13.9 per cent increase from the December study, suggesting a new wave of positive housing market sentiment. It was the highest reading for the index since May 2015 and 1.4 per cent below its level in January 2015.
WA economy still out-performing other states
Dr Wilson said the key to a sustained recovery in the Perth housing market was ‘an improved performance from the local economy’.
January figures show the jobless rate has dropped 0.4 points to 5.9 per cent.
The WA economy is coming off the back of a long mining boom, with prices for some commodities produced in the state now falling.
But there’s more to WA than just mining, with the latest CommSec State of the States Report showing the West is still out-performing Queensland, South Australia and Tasmania.