Who is in the driving seat?

Buyers are back in the driving seat according to the Real Estate Institute of WA's June quarter property market results.  The Perth median house price fell 2.5 per cent to $490,000 from the revised March result of $502,500.   The dip in the median is due mostly to a surge in sales in the $400,000-450,000 range and a fall in sales of homes listed between $600,000 and $2 million.

Fewer sales in the $1 million to $2 million range shows the top end of the market is still vulnerable, and perhaps those who may have bought under different circumstances have put off buying, instead staying put and renovating or extending their own home or selling their investment property.

Preliminary data suggest that the number of dwellings sold state-wide was down 7 per cent on the March quarter, the lowest level since December 2008, when the First Home Owners Grant Boost re-invigorated the market.

The fall in the number of active first-homebuyers reported by the Office of State Revenue remains a concern. In addition, softened demand from slowing population growth has also contributed to fewer homes changing hands. The latest Australian Bureau of Statistics demographic data for the year to December 2009 showed WA population growth fell 17 per cent compared with the year before. Numbers fell from 70,000 extra people in the year to December 2008 to 58,000 in the year to December 2009.

This slowing population growth obviously has implications for demand for established properties as well as new building and rentals.  The fall is not unexpected given that the Commonwealth Government has that indicated migration levels were projected to fall by 20 per cent for the 2009-10 year.

With 14,500 homes for sale at June 30 compared to 12,700 in March, the market has swung back in the buyer's favour, offering more options to more discerning buyers and creating increased competition among sellers to attract the relatively fewer cashed-up purchasers.   The average time taken to sell increased by 9 days to be just over two months.