Rental prices are predicted to continue upwards as home owners are faced with higher costs of ownership following the introduction of the carbon tax yesterday.Perth’s house prices have exceeded the average property market recovery across Australia’s capital cities in June, marking the largest monthly national inner-city increase in more than two years, according to one property analytics group.
But Real Estate Institute of Western Australia president David Airey has warned market watchers to keep a long term view on Perth’s property trends, which are still down on the year and quarter.
Western Australia’s fly-in, fly-out city, Perth, saw a subtle 2 per cent increase in property prices last month, bringing the median dwelling price up to $460,000, according to property analytics group RP Data.
Perth’s tight rental market has also seen another 4.4 per cent increase on rental yields for houses and 4.9 per cent for units.
Perth’s rental vacancies have been hovering around the two per cent mark in recent months and Mr Airey confirmed he believed there had been an increase on the yield, but that it was hard to measure short term.
But he did predict rental prices to continue upwards as home owners are faced with higher costs of ownership following the introduction of the carbon tax yesterday.
Mr Airey said although the carbon tax would have an effect on home ownership costs, “more moderate increases are expected over the next year”.
Meanwhile, across all Australian cities property prices recovered by 1 per cent, reversing a fall of 1.4 per cent in May, according to the RP Data research.
RP Data research director Tim Lawless said the 55 basis point reduction in the average discounted home loan rate in May and June was likely the catalyst behind the short term recovery.
But Mr Lawless also pointed out the recovery was only on the month., with other indicators still down.
“So far this year capital city dwelling values have simultaneously risen over three months and fallen over three months,” Mr Lawless said in a statement.
“The wash up is that values have fallen more than they have risen, with the market down by -1.2 per cent over the first six months of 2012.
“Regardless, while discounted variable interest rates are as low as 5.6 per cent, Australian households remain understandably cautious about the economy given the global uncertainty.”
Mr Airey said there was “no doubt” that over the past six months the attitude of buyers to the property market has improved considerable with sales much stronger in the under $600,000 market.
But he said REIWA had yet to really see an impact from recent rate cuts on in the market.
“We’ve not seen that come through yet” he said. “It’s had the best impact on people with an existing mortgage.”
Affordable housing needed in WA
Meanwhile, lobby group Australians for Affordable Housing has called on the WA Government to review its National Affordable Housing Agreement after a Council of Australian Governments Reform Council report revealed housing costs in Perth were causing stress for 39 per cent of low income renters.
“The National Affordable Housing Agreement between the States and the Commonwealth is meant to improve housing affordability in Australia, but it’s clearly not working” said Australians for Affordable Housing campaign manager Sarah Toohey said on Friday.
“For the very lowest income renters in Western Australia, in the bottom 10 per cent of incomes, things are even worse with 42 per cent in housing stress.
“Western Australia has had very few affordable properties for low income earners looking to buy a home. Just 4 per cent of properties for sale were affordable to 40 per cent of the population.”
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