Housing Costs: DollarsThe diminishing level of listings in metropolitan Perth in the wake of strong population growth and improving consumer confidence will create upward price pressure and increased demand for homes.

Properties for sale have slipped to just 8,429, down from 14,092 at the same time last year.

The long term equilibrium for Perth is around 12,000 while the lowest number of listings recorded by REIWA was 4,793 in June of 2006.

Agents are reporting an increasing shortage of properties in popular price ranges especially around the median of $500,000. REIWA data suggests that listing stock is trending downwards on the back of strong sales turnover and these properties are not being replaced with enough new listings to meet demand.

Now that the market appears to have turned in favour of sellers, many may be holding back with the expectation of a better price in the months ahead. Until more sellers list their properties and until we get more new homes onto the market from builders, then competition from buyers will put pressure on prices.

While the upturn in the market with both sales and price was encouraging after three years of sluggish sales it is important to ensure a sustainable market for buyer access and consumer confidence.

Perth’s population is growing at around 1,000 people every week and the market is turning over around 1,000 properties every week. As our population continues to grow on the back of the state’s healthy economy there will be ongoing pressure with the housing system.

We are not heading into a boom by any means. The market is reacting to pent-up demand so it’s probably a good time for hesitant sellers to take advantage of a market full of keen buyers and with sales happening quickly for correctly priced property.

The buoyancy in the market has prompted a lot of renewed interest in auctions.

When listings get tight and demand is strong an auction is probably the best way for a seller to get a cash sale at auction under the hammer. It also means that buyers will need to get finance pre-approved and set a bid-limit so they can compete to buy a popular property.

This article was originally published on reiwa.com.