It was an interesting month in terms of the local property market in July, with overall sales figures reflecting the expected seasonal lull and continuing their downward trend but with the number of properties listed on the market also falling (source: REIWA). Hardest hit were the Western Suburbs, where sales activity dropped by 44%, but the cities of Bayswater and Bassendean bucked the trend with a reported increase in sales turnover for the month.
The first few weeks in August has seen an increase in the number of properties listed for sale, perhaps in anticipation of some finer weather around the corner, and could be a sign of a return to what had prior to June been an almost continuous upward trend in the number of properties listed for sale in the last 18 months, albeit still short of that magical equilibrium number said to be around 12.000 listings.
WA consumer sentiment still down
There’s been much talk in the media about the slight rise in consumer sentiment nationally, but not so for WA, where we’ve continued to suffer from a downward trend in business and consumer confidence.
In an article published by ABC News on 31 July, the Chamber of Commerce and Industry (CCI) of WA indicated that it saw low consumer confidence as being “a key risk factor to the state’s economy” as it was undermining “investment activity outside of the mining sector”. Whilst the continuing lack of business and consumer confidence was nominated as a key reason for the Chamber downgrading its growth forecasts for WA, the report goes on to quote CCI chief economist John Nicolaou as saying that the shrinking growth expectations represent a “normalisation” of the state’s economy.
“It’s growth rates that are more trend-like and are consistent with an advanced economy which is growing strongly and will ensure job creation,” Mr Nicolaou is quoted as saying.
“There are still jobs being created, particularly outside of the resources sector, which is good news that the economy is starting to diversify.”
For a full copy of the article click here.
So, what does it all mean?
Our property market appears to be continuing to be influenced by low consumer sentiment in WA, despite the local economic outlook appearing to be relatively favourable. If the number of properties listed for sale continues to trend upward and head past the 12,000 mark, we’ll start to see conditions beginning to favour buyers over sellers, rather than the more neutral market that we seem to be in now.
Only time will tell where the market will head, but I continue to emphasise that on the whole, achieving a great price in the sale of a property is less easy now than it was twelve months ago when there was less competition and more buyer demand. Agent selection is, and will continue to be, key in achieving a premium result in the current market and months ahead.
If you’re looking to buy, remember that the market is not homogenous and that whilst sales in some suburbs and price ranges appear to have stalled or dropped in the last few months, there are still a select number of suburbs and price ranges defying that trend. If you’d like details of recent suburb sales and performance data to help with your search and negotiations, just email me at [email protected] and I’d be happy to provide you with a report.