Nick Bruining: These new statistics show Perth’s runaway housing market may have finally hit peak price wall

Early signs are starting to emerge that the surge in Perth’s residential property market may be starting to slow, which could be good news for those struggling to get a foot on the ladder. Market insiders are already noticing changes, most notably in the past four to five weeks. CBRE is one of Perth’s biggest property valuers, providing valuations to lenders including the big four banks and others. State director Jamie van Burgel said valuers had spotted a subtle shift in the market in recent weeks. “Those working in the suburbs note a decrease in purchasers from the east coast and less activity from buyers’ agents,” he said. REIWA data provided to Your Money reveals a 58 per cent jump in property listings between the end of August and October. That coincides with an increase in the “median days to sell” number from nine to 13. The number of Perth listings has risen steadily from a low of 2798 in May to 3103 in August. A big jump saw the October figure lift to 4929, and by last week it had soared to 5651. While the latest figures are still well under historic averages, the trend is upwards. Real estate experts have previously stated Perth’s “equilibrium” point — where demand matches supply — is at around 12,000 listings. The equilibrium is a hypothetical point where upward pressure on prices, driven by demand, is matched by the downward pressure of plentiful supply. REIWA president Cath Hart said it was still a seller’s market buoyed by good prices, but new home construction completions were helping to satisfy some of the demand. “This has moderated some of the previous ‘fear of missing out sentiment’ in the WA market and, as a result, the median time to sell a home has increased slightly,” Ms Hart said. “It is still well below the pre-COVID median of 40 days.” Other issues likely to affect sentiment include the upcoming Federal election. The latest statistics come on the back of CoreLogic data released last week that showed auction clearance rates across the country had slowed for the 11th week in a row. “The preliminary auction clearance rate came in below the spring season average to-date of 66.7 per cent and the 11th week in a row where the early success rate has been below the 70 per cent mark,” the property market analysts said. In the same report, CoreLogic said the median house price in Sydney fell 0.2 per cent but it still showed a positive 12-month return of 3.3 per cent. Melbourne, on the other hand, showed a decline of 2.4 per cent while Perth was still the standout champion with a 22.3 per cent increase since this time last year. While no one is predicting a fall in prices any time soon, Mr van Burgel said those worried about missing out could probably breathe a sigh of relief. “While I am no soothsayer, I would suggest that we may look back at this time as being the peak,” Mr van Burgel said. Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association