By Nicola Blacker
Perth house prices may be overvalued by 30 percent according to the latest figures.
A recent report by SQM Research states that house prices are overvalued by 10 percent nationally, with Perth rising to 30 percent – the highest in Australia.
According to the report, Perth could be “on the verge of a correction”, based on leading indicators and a negative outlook for the local economy, largely due to the decline in mining revenue.
New homebuyer Ben Andrich is worried at the prospect of a correction, minimal or otherwise.
He is concerned that if house prices were to fall then he may have over-capitalised and will be unable to move as planned if there’s not enough equity in his property.
“At the end of the day, there’s not a whole lot I can do,” said Mr Andrich.
David Wellstead, Property Consultant for the Professionals Wellstead team, believes that the current property market is fairly stable both in sales as well as investment.
“The market is a rollercoaster, it goes up and down. The last 10 years have seen a long term property price increase so prices may decrease slightly but it’s part of the cycle.”
Mr Wellstead also points out that there is a current ‘gluttony of units’ in Perth attributed to people purchasing investment units during the mining boom.
Consequently he believes a decrease in rental prices is more likely as the boom has slowed and demand for rental properties is decreasing.
REIWA has released data showing that six Perth suburbs have recently had individual property sales of $1 million or more for the first time.
This has been attributed to re-zoning allowing higher density living but Perth property prices are still expected to grow by between one and four percent in 2015.
While this is the lowest growth rate predicted in any Australian state, it is positive news for people looking to sell or purchase property in the near future.