Posted on Wednesday, June 4th, 2014 in by Matt Garmony
As the Reserve Bank of Australia (RBA) held the official cash interest rate at 2.5% at its June 2014 meeting for the 10th consecutive month, the Perth median dwelling values fell by 0.8% in May 2014 according to RP Data-Rismark. RP data’s statistics indicate Perth’s median house price has declined by 1.2% this year to date, however still remains 5.7% above the May 2013 median house price of $525,000 and is the only capital city in Australian in which home values have declined in the year to date.
The Reserve Bank of Australia governor Glenn Stevens stated on 3 June 2014 in the media reease on the Monetary Policy Decision “interest rates are very low and for some borrowers have edged lower over recent months. Dwelling prices have increased significantly over the past year, though there have been some signs of a moderation in pace of increase recently”. He also stated “the Australian economy grew at below trend pace in 2013 overall, but growth looks to have been somewhat firmer around the turn of the year.” There has also been a fall in business investment according as to a statement from Macquarie Bank in which “key data releases have shown that the business investment has fallen for the second quarter in a row, well below analysts’ forecast, however the outlook is modestly improving.”
Our enquiries to residential real estate agents within the Perth metropolitan area have indicated reduced interest in properties listed on the market for sale, in particular properties towards the upper end of the market value range, in most value market segments. There is the potential for a correction in market values in early 2015 following the completion of many homes and home unit complexes currently under construction, which will increase the supply of residential dwellings.
The commercial office market continues its subdued conditions with net rents declining and incentives being offered to tenants. We understand industrial land value enquiries have fallen and land values have remained stable however there still appears to be steady demand for securely leased investment properties, particularly in the industrial market sector.
With some uncertainty as to the current direction of the Perth property market, we recommend that buyers seek independent valuation advice in order to assist them in their important property decision making processes, and we welcome your enquiries to one of our licensed valuers.