WA property: Why Perth’s cheapest homes are rising fastest in price

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Prices for Perth’s cheapest houses are rising the fastest, with interest rate increases not deterring first-time home buyers.

A CoreLogic report shows that the cheapest quarter of Perth homes has risen 1.7% in value over the past three months, while the middle half has risen by 1.4% and the top quarter by just 0 .8%.

This mirrors a forecast by property analyst Gavin Hegney last year that price increases would ripple down the real estate ladder, with cheaper homes to take the biggest spoils this year.

Camera iconReal estate analyst Gavin Hegney. Credit: Astrid Volzke/Western Australia News

The same research, called Monthly Housing Chart Pack, shows that WA has the highest proportion of first-time home buyers in Australia, with 28.4% of Perth owner-occupied finance going to entry-level buyers. in June this year.

That compares to the national average of 21.9% of homeowner financing going to first-time home buyers.

The report confirmed that house prices in Perth have reached record highs, with prices rising by 0.2% in July.

During the quarter, home values ​​increased by 1.2%, while over the past year, values ​​increased by 5.5%.

The median number of days on market was 20 in the three months to July, up just one day from a year earlier. Perth’s sales are faster than the combined capital’s median of 29 over the same period.

In the WA region, the quarterly median is 33 days, which is faster than the 36-day selling period recorded at the same time last year.

For borrowers wondering how their mortgage compares, the same report highlighted the average rates paid in Perth. The CoreLogic report shows that in June, the average long-term fixed rate was 4.54% for new loans to homeowners and 4.73% for new loans to investors.

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The average variable rate for homeowners is 3.05%, while the average fixed rate, up to three years, is 3.69% for homeowners.

For investors, the average variable rate was 3.39%, or 4% if fixed for up to three years.

The report said data from the March quarter showed lenders becoming more cautious in their approach to higher debt-to-income ratio loans and high LVR loans.

Rates have risen sharply over the past three months after the Reserve Bank of Australia raised its official exchange rate in a bid to tame runaway inflation.

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