Spring has arrived in Perth with very different market conditions to those buyers were facing earlier this year.
Property values have started to soften, there are more homes for sale than a year ago and competition among buyers has eased. Together, those changes could give buyers something that has been in short supply in Perth for some time – more choice and more room to negotiate.
Cotality’s September Home Value Index shows Perth dwelling values fell 0.8% in August and 3.2% over the three months to August, leaving the market 3.2% below its April peak.
And prices are not the only sign that conditions are shifting.
Buyers have more choice and less competition
Figures from SQM Research show 15,146 Perth properties were listed for sale in August. While available stock dipped slightly from July, it remained 6.0% higher than a year earlier.
At the same time, Perth’s combined asking prices fell 2.2% over the month, suggesting some vendors are starting to adjust their expectations.
There are signs of less competition on the ground too.
Ray White’s open-home data shows Perth averaged 3.1 attendees per open home in early September – 1.5 fewer than immediately before the federal Budget. Perth’s North West and North East recorded some of the largest falls in attendance nationally.
Ray White chief economist Nerida Conisbee has linked weaker demand across more affordable, investor-heavy markets to Budget changes affecting negative gearing and capital gains tax.
For buyers, however, the important point is what these changes mean at property level.
You may have more time to make the right decision
Cotality estimates Perth sales volumes are now more than 20% lower than a year ago, with research director Tim Lawless saying sales are tracking well below both year-ago levels and the five-year average.
That points to a clear reduction in buyer demand – and could change the balance between buyers and sellers.
When fewer buyers are competing for a property, there may be less pressure to make an immediate offer simply because you are worried somebody else will beat you to it.
Instead, you may have more time to inspect the property properly, check comparable sales, organise building and pest reports and work out what you believe the property is actually worth.
Vendors may also have to be more realistic. A property that has been sitting on the market longer than expected, an asking price that no longer reflects comparable sales or a seller who needs to move on could all create room to negotiate.
But cheaper doesn’t always mean better value
That distinction is important because Perth property is hardly cheap compared with a year ago.
Despite the recent falls, dwelling values were still 15.6% higher year-on-year in August. So while market conditions may now be more favourable for buyers, the opportunity will vary considerably from one property to another.
A lower asking price does not automatically mean a home represents good value. Buyers still need to consider the property’s location, condition, comparable sales, local supply and demand and the vendor’s circumstances.
That is where the changing spring market could become particularly interesting.
Rather than simply having to compete for whatever becomes available, buyers may increasingly have the opportunity to compare properties, identify where genuine value exists and negotiate from a stronger position.
This is where having an experienced buyer’s agent on your side can help. Resolve Property Solutions can assess the property and its value, investigate the circumstances of the sale and negotiate accordingly. Book your initial discovery call so we can connect you with the right expert from our team.
