Q2 Report, Floreat.
Since quarter one, the market has changed quite drastically, we’re seeing the highest transaction levels in 7 years! Weekly sales in Perth hit over 1,000 this quarter for the first time since 2013. Month on month we’ve seen introduction of new policy, government aid and change in buyer behaviour.
April was still a month of uncertainty. The pandemic was in full swing and no one knew which way we would go. Through which, stock levels were in substantial decline; sellers became hesitate to bring their property to market and with the hold on mortgage repayments, they didn’t have to. Home opens were cancelled and everything went digital.
May saw the introduction of JobKeepers and low interest rates at 2.09%, meaning individuals could afford to make the move. This begun the demand for property in Perth begin to spike – with rents increasing it became cheaper to pay off a mortgage than to rent; combined with property in Perth remaining affordable. This saw a surge of +21.5% in property sales for the month.
Making headlines was “Perth property prices drop” the Perth Metro Region saw -3% decrease which is not uncommon in these months. What hadn’t been reported is that many suburbs saw an increase as buyer activity
And along came June – the government announced a $20,000 grant on the back of a $25,000 Home-Builder grants from the federal government to build or substantially renovate your home. In addition to the existing $10,000 first home buyers grant, you were now entitled to up to $55,000!
With mortgage repayment holidays still on offer, few have been forced to sell their homes. Despite confidence in the market increasing, we are still experiencing very low stock levels – we’ve consistently sat at -30% since this time last year. A scarcity of supply is certainly assisting in the insulation of home values here in Perth. Experts estimate the sales to listing ratio is tracking around 1.3 at present, for every 1 listing there are 1.3 sales so we have a high level of absorption. The impact of this was huge; land sales in June were the highest they’ve been since 2009!
With all of these changes, property sales went through the roof, increasing by an additional 55.1% from May and 45% higher than June 2019. We saw the highest number of sales in 1 week since 2013 and highest month of sales since 2015. Floreat prices increased by +2.1% this quarter as this desirable suburb remains difficult to get in to. There are only 8 homes for sale in Floreat right now which has resulted in a 5% increase in price this year.
With all of these changes still in effect, it is difficult to see these trends changing any time soon. Many individuals are still holding on to property as they are wary of the market, which means stock levels will continue to remain low. The demand for property here in Perth doesn’t seem to be going away either. As more breakouts happen worldwide and here in Australia, Perth is becoming an even safer investment for the future as we begin to return to life as normal. If we do begin to see an adjustment in coming months as policies change and mortgage payments resume, these enquiry levels will not suddenly drop off. Having 30 groups through each home open has been unheard of and these buyers are still out there looking for their next home. Yes, sales levels may not continue to increase by 50% month on months but we will remain in a significantly stronger position
than we were this time last year.
I’m hopeful that we will see these positive trends continue through to quarter three, and as long as the supply outweighs the demand, we will. In Floreat the buyer enquiry for property is going nowhere, there will always be a queue of families waiting to move into this fantastic neighbourhood. It really has been an interesting time to be in the industry and I’m excited for what’s to come.