By Kate Emery
Perth’s median house price has hit a record $545,000 and is tipped to reach $570,000 this year.
The Real Estate Institute of WA said the $570,000 figure would be achieved if house prices grew at the higher end of its forecast range of 3 to 5 per cent this year.
But REIWA president David Airey warned looming economic headwinds, including a slowing economy, higher unemployment and the prospect of rising interest rates, would moderate growth in the second half of the year.
Speaking at an Australian Property Institute event yesterday, Mr Airey said the 10 per cent growth in the Perth market last year – from a median house price of $495,000 in the December 2012 quarter to a projected $545,000 in the December quarter last year – would not be repeated this year.
“With a softening first-homebuyer market, a weak investor market, growing stock and falling rents we could expect activity in the second half of 2014 to slow due to a number of powerful forces,” Mr Airey said.
“Not only the softening economy, growing unemployment and possible rate rises but falling confidence due to what we’re likely to see – another horror Budget, or certainly a tough Budget, from our State Government but an absolute horror show from Joe Hockey.
“The (Federal) Budget, which will come out in May, will probably have a great effect overall on confidence in the residential market.
“We expect to see price growth in the 3 to 5 per cent range – 5 per cent would lift the projected $545,000 median house price recorded in December to $570,000 . . . and I think that’s probably where we’re headed.”
REIWA’s predictions came as an Australian Property Monitors report found Perth’s median house price rose 8.4 per cent last year and 1.8 per cent over the last quarter of the year to $605,856 – a record for its data.
APM uses a different method to REIWA so the groups’ figures vary considerably.
Perth’s median unit prices were up 3.7 per cent for the quarter or 9.3 per cent for the year.
APM senior economist Andrew Wilson said Perth had eight consecutive quarters of house price growth and six consecutive quarters of unit price growth.
He expected the Perth market to “remain solid” this year.
APM said all Australian capital cities recorded growth in house prices over the December quarter and for the calendar year for the first time in four years.
It found Sydney still led the way in house prices with a median of $763,169, followed by Darwin ($687,842) and Perth.