Paulette in the West Australian today, Perth property has officially peaked?

by Kim Macdonald, The West Australian

Perth property has officially peaked following a monthly price drop in August, for the first time in more than two years.

New statistics from real estate consultancy CoreLogic shows a 0.2 per cent price drop last month, down from its peak in July this year.

But local real estate agents maintain it is just a winter wobble, with pent-up demand likely to up drive prices over the traditionally busy spring season.

Agent Paulette Contessi of the Contessi Group said the market was locked in a vicious cycle caused by low stock levels.

Stock has hit 8000 dwellings for only the third time in a decade, well down from the 13,000 listings in a balanced market.

“It’s like a horrible little hamster wheel,” said Ms Contessi.

“People don’t feel confident to put their home on the market because there is little for them to choose from.”

“Everyone is sitting back waiting for someone else to go first.”

Ms Contessi said about 80 per cent of buyers now made their purchases subject to the sale of their own home, which had slowed sales drastically compared with last year’s cash market.

She said the winter period had also been marked by an unusually big number of people delaying sales so they could holiday, with many enjoying the European summer now borders were open.

Damian Collins, president of the Real Estate Institute of WA, claimed interest rate increases had a negligible effect on the market.

Mr Collins stood by his long-standing prediction that prices would improve over the rest of the year.

“While the interest rate rises may slow the market, we still expect positive growth for the balance of 2022 and into 2023,” he said.

“With strong demand, a strong economy and population growth, nothing is telling us we will see a downturn. There won’t be rapid growth, but there will be moderate growth.”

Mr Collins said migration would prove the biggest issue to influence prices.

He said WA was likely to get about 15 per cent share of the 195,000 migrants set to come to Australia in the year ahead, following an increase in the quota by the Federal Government.

“If we do achieve that level, it will be 30,000 additional people to house, which will continue the upward pressure on rents and house prices,” he said.

Separate research by Finder, based on analysis of ABS statistics, shows $158 billion of fixed-rate mortgages are set to expire by the end of 2023.

Dubbing it a mortgage time bomb, Finder spokesman Graham Cooke said low fixed rates are set to expire into variable interest rates of more than 5 per cent over the next 12 months.