‘Dangerous FOMO’: Perth listings drop as experts tip fresh price surge

Perth house prices are poised to surge again, buoyed by Labor’s victory on Saturday and fresh data pointing to renewed upward pressure.

The Agency Wembley director Corey Adamson said REIWA’s weekly snapshot showed less than 5000 properties for sale; which, he said, was particularly unusual for this time of year.

The number of houses and units for sale currently sits at 4764, down from 5091 listings a month ago.

“For stock to be dropping like this at this time of year is very strange,” he said.

“For it to be under 5000 is not good for anyone except for sellers.

“This tells me stock levels are going down, competition is going to go up, I think prices will rise again.”

Strategic Property Group managing director Trent Fleskens said by tracking the stock on the market and weekly transactions, it was easy to predict house price directions.

“Stock on market bottomed out around 3300 properties mid-2024, this was unsustainable and created dangerous FOMO in our market, which led to a 24 per cent increase in the median price of property in Perth that year,” he said.

“Stock on market then started rising in the third quarter where it capped out at a still critically under-supplied level of around 6000 properties before dropping below 5000 again going into Christmas.

“Many would have expected this number to start increasing again, but it hasn’t. In fact, stock on market is lower now than it was in January.”

Fleskens said low stock pointed to a continued reticence to sell, sustained demand across the housing continuum, and an expectation of rate cuts.

“I expect this number to hover in this vicinity, at 30 per cent of a balanced market, for quite some time as rates drop and prices shoot up again,” he said.

But REIWA president Suzanne Brown said while active listings were lower than a month ago, they were significantly higher than this time last year with house listings alone up almost 50 per cent.

“Our members report many home owners were planning to wait until the end of the holiday period before putting their home on the market, so we expect new listings to increase over the coming weeks,” she said.

“We’re not expecting a return to the extreme conditions seen a year ago. Market conditions have changed and population growth, a key driver of demand, has been slowing.

“In addition, buyers are being more discerning and taking their time in their purchasing decisions. They are also being very prudent when it comes to prices and making an offer.”

Brown said well-presented homes were seeing good numbers at home opens and receiving multiple offers however other properties were seeing less interest and taking longer to sell.

Ray White Group chief economist Nerida Conisbee said with Labor securing victory in Saturday’s federal election, its housing policies were likely to drive price growth upwards short-term before measures on the supply side could take effect.

“The Productivity Commission’s research on first home buyer incentives consistently shows that measures increasing purchasing power, without commensurate supply increases, typically lead to price escalation,” she said.

“With more buyers able to enter the market simultaneously and competing for the existing housing stock, upward price pressure becomes inevitable.”

Labor’s signature policy will extend the 5 per cent deposit scheme to all first home buyers regardless of income with approximately 80,000 Australians expected to enter the property market annually.

Conisbee added by removing the substantial barrier of lenders’ mortgage insurance and the need for a 20 per cent deposit, the policy potentially cut aspiring homeowners’ saving period by years.

“The paradox of Labor’s housing policy is that while it risks exacerbating affordability challenges in the short term through price inflation, it may ultimately create the conditions for improved affordability in the longer term,” she said.

“Higher property prices, while challenging for new entrants, makes it possible for developers to overcome construction barriers and bring new supply to market. As values rise, previously marginal development projects become viable, and the industry gains additional capital to expand capacity.”

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