Latest REIWA Statistics
Sales activity jumped back up 10% this week to 1,020, pushing back through the 1000 mark again. The increase was driven by a 13% increase in house sales, 17% increase in unit sales but a 16% decrease in vacant land sales. Sales activity was strong again this week and although it may not be obvious in the graph below, the trend line in red continues to steepen. Demand for property in Perth is still above the longer term trend.
The state government would be enjoying the increased sales and stamp duty revenue. If we use a median property value of $500,000 and assume all the buyers this week are not first homebuyers, the property is their primary residence, buying an established home and they are not a foreign purchaser, the state government would collect $11,161,000 in stamp duty for the week. This would equate to over half a billion dollars for the year. Compared to sales in mid-2019, approximately half what they are now, the state government currently has an extra $250 million in revenue. No wonder it is hard for REIWA to lobby the government to reform stamp duty.
Interestingly, listings increased again this week despite stock being absorbed quickly. Perth recorded 8135 properties for sale, an increase of nearly 2.5%. The graph below shows listings numbers increasing quite consistently after a low point in the first week of February and this is the first time in six weeks listing have been above 8,000. It would appear there is an increasing number of people who are looking to make a move and sell while there is so much demand for property.
We will keep tracking changes to listings and sales to see if there is any impact to the price growth.
Following on from last week’s newsletter, we are looking at Corelogics’ weekly price indices to gauge how accurate Gavin Hegney’s forecast of 20% price increase over the next 12 months for Perth is looking. This week Perth recorded a 0.44% increase, well above the 0.38% weekly average increase required to meet Mr. Hegney’s forecast. The current weekly average starting from the 12th of October 2020 is 0.29%, so we are getting closer to the required 0.38% average. The graph below shows we are projecting well above the required average with the green trend line above the require average in red. We will keep updating this graph weekly and at the moment the increase in sales appears to be outweighing the increase in listings with regard to increasing prices.
Thanks to the subscriber who nominated Belmont for the next week’s monthly suburb in review.
Reproduced with permission from:
in house economist from Michael Keil @ michaelkeil.com