01/05/2024
Once again Canstar is caught out fudging the fact on the WA property market as discussed below by Matthew Hughes of Capital Property Advisors.
"In a recent discussion on The Real Estate Podcast, we spoke about the latest national property report from Canstar, which suggested a potential slowdown in Perth's booming real estate market… and I found myself wondering about the validity of these claims.
Obviously, it is unrealistic to expect the Perth market to maintain its current growth rate indefinitely, but from what I see in leading indicators and from our “boots-on-the-ground” perspective, there are no visible signs of a slowdown. Quite the opposite, in fact.
We have observed a significant reduction in stock levels, now down to just over 3,600 properties, with median selling days still at an incredible low of just eight days, and our vacancy rate has just hit a historic low of 0.4% in April.
Despite continuing to lead capital growth performance in the greater capital city markets, with values up 2% in April, 6% in the three months to the end of April and up 21.1% over the past year, Perth has moved down the list of projected top performing cities for 2024, to fourth position. The fact that we have led the country in growth the past two years and are currently leading year-to-date this year, but were in third position on this same list last year, should tell you everything you need to know about the expertise of the report writers.
The report also commented on weakening sales volumes and a decline in sales activity in the latter half of 2023, suggesting that Perth's property boom may have passed its peak. However, I think if someone were cherry-picking statistics to support a pre-determined outcome, potentially based on an East-coast bias, pointing to this slight decrease in sales activity would be their only straw they could grasp at. In reality, though, this minor dip in sales activity – which still remains well above long-term averages - might not stem from diminishing demand but rather from the sheer lack of available stock. To illustrate, this time last year we saw 861 properties transacted in a week, whereas last week that number was 1,003. While transactions numbers have dropped a little, would it be unreasonable to assume that it may be due to the fact that over the same time period, stock levels have plummeted by 45%?
Overall, I believe the analysis provided by the report is quite surface-level and perhaps reflective of a broader trend among east coast-based “experts” who seem eager to downplay Perth's success in order to draw investor attention back to their own markets. It seems there's a possibility that much of the negative perspective on Perth could be driven by misunderstandings or misrepresentations of the real dynamics in our local property market".
