Sunday, November 29, 2015

A data guy's analysis of the Perth Housing market - Nov 2015

As a renter in Australia who lived nearly 10 years in a Canadian house that we built, cared for and loved it's nearly (no, it's fully) impossible to ignore the property market in Perth.

If you've read any of my posts you know that Perth in 2012 was absolutely booming.  Ex-pats and their companies were paying extreme sums per week for rental properties and at the lower end you could have up to 30 family's bidding for a single rental property the day it came on the market.  The rental housing market was on fire period with the number of vacant homes (units and houses) said to have hit a low of ~1200 September of 2012.

Things have changed.  A lot.

There are a lot of stories of the declines in real estate with examples of huge rent cuts, as well as significant discounting of homes to sell them. The problem is these are a sample of one.  

So, that said, I've started to pull data.  I've started with 3 key metrics which are readily available and get reported weekly - Sales of Houses, Number of houses on the market, and total vacant rental properties.

Note that I've selected just houses for sales data and properties on the market, not including units or land.  At this point I've not been able to do this with rentals, so it's total vacancies including units.

So here's the first chart:
The index on left is houses for sale on the market - reported weekly (on the blue line).  The index on the right is number of houses sold per week (on the red line).  The green line is a moving average of houses sold using an average of 12 weeks.  

Here's some quick first thoughts:
The sales trend is down per the moving average line, BUT, I'm unsure about the seasonality and I'm interested to see if sales come up in summer and show some of the big peaks that were shown last summer.  So far when you compare November 2015 vs 2014 sales are down ~21% or 130 houses per week.

The other thing is there is a significant change in the trend of houses on the market that starts on the 25th of August 2015 and really hasn't stopped since.  On average during the period from August 25th to Nov 26th - 180 houses have been added to the market.  (That's 180 more houses listed than sold per week for 12 weeks straight - 2200 houses)  

Next is a simple chart of rental vacancies.  Unfortunately I don't have data going back to 2012 but I do have reports that the low was Sept 2012 at 1200.  The week of Nov 26 hit 9400.

There's not much to say either than the trend is good for renters and bad for property investors trying to rent their properties.  

If anyone knows where I can get the rest of the data going back to, well as far back as I can go I'd love to hear it.  I'd also like to hear whether you find this data valuable / interesting.  


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