Housing price falls a shock

David SalvaireSound Telegraph

House prices and sales activity in Rockingham fell through the June quarter, in a move that has shocked industry experts who predicted the market had reached the bottom.

The latest Real Estate Institute of WA statistics show that the median price of a house over the second quarter this year, from April to June, dropped by $18,000 to $382,000.

The fall came after house prices remained at $400,000 through the December 2016 and March 2017 quarters in Rockingham.

The number of houses sold between April and June was 364, which was 130 fewer than the 494 that changed hands in the March quarter.

Unit prices in Rockingham also fell from $305,000 in March to $262,000 through June.

The fall was not as dramatic in Kwinana, with house prices dropping by $10,000 between the March and June quarters to $340,000.

In the same period median rental prices dropped from $340 to $330 in Rockingham, while in Kwinana they fell from $320 to $300.

REIWA president Hayden Groves said the drop came as a surprise after prices had appeared to have levelled out.

“There was some stability that seemed to appear in the market (between December and March),” he said.

“In the summer months there was a spike in activity but it was a bit of a dead cat bounce because most people thought that was the turn of the market.

“Agents were reporting to us saying that things were OK but it’s slowed since then. The falls are moderate and that’s been the case across the metropolitan area.”

Mr Groves said the first-homebuyers grant had led to a surplus of stock in the Rockingham and Kwinana areas, with people encouraged to build.

“Overall we’ve been anticipating that the bottom of the market is here and in some sections we think that’s already arrived,” he said.

“But if you’re in the established home market between the $350,000 and $450,000 price bracket and looking to sell, it’s going to take a long time to find a buyer because the current settings around the first-homebuyers grant are not helping you buy. That’s a real problem for the home owners who need to sell because there’s still too much of that stock around.”

A recent Pain and Gain report by property analysis group Core Logic revealed that nearly a third of houses in Rockingham sold at an average loss of $30,000 between January and March.

Almost $6.5 million in total was lost on Rockingham properties sold in the same period.

Conversely, the 68.7 per cent of properties that sold for a profit had an average of $174,500 in gains, with $52.6 million made in total through the March quarter.

Properties held for more than 10 years showed a larger return on investment.

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