Property markets in Adelaide and Perth are moving into overdrive, with competition among buyers getting fierce as homes sell swiftly and rental vacancies plunge.
In the South Australian capital, a shortness of stock and increasing interest from buyers has resulted in an uptick in activity, with hom…
Property markets in Adelaide and Perth are moving into overdrive, with competition among buyers getting fierce as homes sell swiftly and rental vacancies plunge.
In the South Australian capital, a shortness of stock and increasing interest from buyers has resulted in an uptick in activity, with home opens well attended, properties attracting multiple offers and many houses selling above their listing price.
Harcourts Packham principal James Packham said there had been a heavy reduction in the number of homes listed for sale, with some areas down more than 30 per cent from the same time last year.
“The number of buyers in search of a home, however, seems largely unchanged,” Mr Packham said.
“This has caused a ‘seller’s market’ where a large volume of buyers find themselves competing over a reduced volume of available homes for sale.”
Harcourts Sergeant sales representative Ben Gow pointed to a recent case study that neatly illustrated the rising competition in Adelaide residential property.
Mr Gow recently listed a property in the north-eastern suburb of Redwood Park, which attracted an abundance of buyer interest almost as soon as its advertising campaign went live.
He said the first home open, which was held just two days after the property was listed, attracted 61 groups.
“Due to the demand, I opened the home again on the following Monday evening, which attracted a further 27 groups,” Mr Gow said.
“A total of 88 groups in two opens. The property had nine offers received, four were above the top end of the advertised range.
“We were officially sold after eight days on the market.”
In Adelaide’s south east, Mr Packham said a similar story played out for a home listed in Eden Hills.
Mr Packam said there were 130 people in attendance at the first home open, with 10 formal offers lodged in short order.
“We advertised the home from $530,000 - $560,000 and sold for over the top of the advertised price range,” Mr Packham said.
The sales results seemingly defy the economic uncertainty that the COVID-19 pandemic has wrought, Mr Packam said.
However, he did acknowledge many prospective vendors were hesitant to place their home up for sale in the current climate, and urged those who were considering selling to take advantage of the seller’s market.
“The old saying goes ‘supply vs demand’,” Mr Packham said.
“Currently supply is at an all-time low, yet buyer demand is at an all-time high.
“Add huge amounts of buyer competition to open inspections, fear of loss from buyers and that is a recipe for selling your home for the highest price in the shortest amount of time.”
Meanwhile, in Perth, houses are selling 27 days faster on average than they were at the same time last year, with most taking less than a month to clear the market.
Real Estate Institute of WA president Damian Collins said the conditions were similar to what was being experienced in Adelaide - high levels of interest, multiple offers and a sharp fall in listings.
“In September, there was a 20 per cent decrease in the number of properties for sale on reiwa.com compared to the previous year,” Mr Collins said.
“This combined with low interest rates and a return to stronger population growth explains why we are seeing houses sell at a quicker rate.’
Fastest selling suburbs include Subiaco and Kingsley, where houses are taking an average of 12 days to sell, followed by Rivervale, which has an average selling period of 14 days.
Mr Collins said he expected Perth’s median house price to begin increasing over the coming months.
In Perth’s rental market, vacancies have plunged to their lowest level in 13 years, to 0.96 per cent.
Mr Collins said he expected vacancies would likely fall to their lowest ever level of 0.8 per cent, which was recorded in March 2007.
“We have certainly hit a rental crisis where tenants looking for a rental will potentially find themselves unable to find a home,” he said.
“In addition, the reduced supply is putting upwards pressure on rents, with property managers on the ground finding increases in rent are occurring on new leases, as prospective tenants are in competition with each other to secure the limited supply.”
The changing market conditions in Perth have prompted a revision of long-term price forecasts, with Westpac chief economist Bill Evans predicting property prices to grow by 18 per cent by 2023.
Data from CoreLogic showed the market was starting to turn from it’s long-running trough, with Perth’s median house price up 0.2 per cent in September.
Momentum Wealth residential investments committee chair, Emma Everett, said the combination of tight supply and relative affordability as compared to other states was creating a unique opportunity for investors to enter the Perth market.
“With quality stock already hard to come by in many of our investment-grade suburbs, and days on market reducing as a result, buyers who wait for further indicators of market improvement risk entering the market when there is less stock to choose from and increase competition for high-quality properties, which could mean paying more to secure a property in their desired area,” Ms Everett said.
