Conveyancing Activity: Has WA Hit Bottom? Qld May Be At Peak
Posted at Legal Practice Intelligence - 11 July 2016
Not even low interest rates has saved the Western Australian property market.
Over the past 12 months, Perth dwelling values have fallen by 4.7%. In the June 2016 quarter, Perth dwelling values fell by 3%.
Falling prices usually coincide with reducing property sales activity.
The number of property transfers in WA is 16% lower for the first five calendar months of 2016 compared to the equivalent period of 2015. It has gone from bad to worse, as 2015 was already heavily down from 2014.
In WA, the property market seems to be more closely tracking the price of iron ore than the level of interest rates. Recent population growth in WA has also been weak.
Iron ore, crude oil and Gold have been on the up this year. As long as interest rates stay close to current levels, the worst may be over for WA property prices and conveyancing activity.
Property sales activity in Queensland has been steadily increasing over four years.
Brisbane dwelling values increased by 5.3% over the past 12 months.
For the first five months of 2016, the volume of property transfers in Queensland was 3% higher compared to the equivalent months of 2015. However, weakness is becoming evident, as March and April 2016 were both lower than last year.
If the four year uptrend is coming to an end, the signs are that it will more likely be a gentle downward shift rather than a sharp fall.
It is remarkable that the property markets of Western Australia and Queensland are almost mirror images of each other.
It appears that WA is passing through a trough while Queensland is passing through a peak.
Perhaps, while interest rates continue in a "coma state", the property markets of each state will increasingly take on a life of their own. Each state will be affected to different degrees by a multitude of factors including iron ore prices, population changes and wages growth.
Source: Dwelling values - CoreLogic RP Data. Property Transfers - land registries.
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