What the newest numbers for the Perth property market mean for investors.
The Numbers
According to Property Pulse, a recent report authored by RP Data, Perth has the fastest-selling properties in Australia. According to the report, the average time on the market for an Australian home is 80 days in the twelve months to March 2014, while units are taking 75 days to sell. For the previous twelve months, the numbers were 94 days for houses and 88 days for units.
Perth and Sydney are the two cities leading the market. The average home in Perth stays on the market for 54 days compared to 59 days for Sydney. The cities having the hardest times selling homes were Hobart at 90 days and Darwin, where it takes 86 days to sell the average home. Sydney did beat Perth in times for units, 49 to 56.
What I am seeing in the Perth market
Despite having some of the quickest selling times in the country the Perth market has been gradually softening since the start of the year and it is now taking longer to sell.
The truth is that if your property has not sold in the first 2-3 weeks you are not capitalising on the peak buyer demand and the property will start to go stale by the 4th week. At that time nearly all buyers shopping in the suburb would have seen it for sale and home open numbers will drop off rapidly, dropping your chances of selling for a good price.
So if you are not finding the market, it is far better to seek buyer feedback and adjust your pricing in your first 2-3 weeks. In nearly all cases you will then still have good demand to sell with competition forcing the price upward.
What Economists Say
According to Cameron Kusher, head of research for RP Data, every capital city is reporting faster sale times, creating more leverage for those selling homes. Mr Kusher feels that there is a symbiotic relationship between sale times and lack of negotiation: when demand is high and there is no negotiation, the process goes faster. Meanwhile, the faster homes sell, the more demand is created, lowering the chance of negotiation.
The general consensus is that we are now in what is known as a “seller’s market,” where the seller has more leverage in negotiations than the buyer.
What It Means to You
We concur with Mr Kusher and with the general consensus: sellers have the most leverage in negotiations right now. If you are here trying to navigate the Perth property market, your job as a buyer is even tougher and you must do your research. Conversely, if you want to unload a property that isn’t serving your portfolio or business plan as expected, now is a great time to sell.
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