The property market in Perth has come to a grinding halt as first homebuyers and investors look for other markets. However, rural WA has continued to grow, albeit at a slower pace.
Residex figures indicate Perth has only managed negative growth in the March quarter with a rate of -1.08%, while country towns of WA have been able to lift slightly at a rate of 2.67%.
However, the Real Estate Institute of Western Australia (REIWA) has released figures indicating that Perth has, in fact, grown by 2.2% to lift the median house price up by $10,000.
Either way, REIWA President Rob Druitt agrees that the market in Perth and WA overall has slowed down from a vehement climb over the last two years.
"Our data indicates there was no price growth at all in a number of outer areas, but the strongest growth was recorded as being along the coastal regions of Joondalup," he says.
REIWA data also indicates that residential stock in the metropolitan area had risen by 21% to 13,800 dwellings, which Druitt believes is attributed to investors exiting the market.
"In general terms the outer areas experienced the highest rates of stock increase. This can probably be attributed to declining first homebuyer and investor activity in lower priced areas, along with recently constructed new housing coming onto the market," he says.
Despite a slower market, WA, like many other states, is facing the issue of housing affordability. The WA state government has now introduced a housing affordability package to combat the problem, but Druitt says that for the issue to be properly solved the government must look at tax reform.
"Investors provide 80% of rental accommodation, and the more encouragement that exists for them to enter this market and to hold onto their properties, the more supply there'll be for tenants, and the greater opportunity there is to keep rents at reasonable levels," he says.
Even though Perth has slowed down overall, three suburbs in the capital have performed well in the March quarter.