East coast investors raiding the Perth property market are being warned to be cautious with too many paying well above the asking price to beat the competition without regard to quality or location.
Hotspotting director Terry Ryder said too many buyers were acting in haste.
“Many will regret decisions made in haste amid the frenzy,” he said.
East coast investors have been issued a warning. Credit: Ross Swanborough
“The latest sales volumes data suggests that the Perth market has passed its peak in terms of buyer activity and is unlikely to continue leading the nation on price growth –although the low level of listings of properties for sale is partly to blame.
“Our new analysis shows a significant drop-off in sales across Greater Perth in the past six months. There are a number of other signals that the peak has been reached, or passed, in this market – including longer “days on market” in some areas and price decline at the top end of the market.”
The warnings come with the winter release of the latest Hotspotting Price Predictor Index of the top 50 ‘supercharged suburbs’ around the nation where sales volumes have been steadily increasing over more than four consecutive quarters.
More than half of the suburbs listed are located in New South Wales, with Western Australia failing to secure even one entry on the list that it dominated this time last year.
“History shows that there is a correlation between sales volumes and price movements: the number of sales changes first and then prices react – with a time lag,” Ryder said.
“This is true whether markets are rising or falling and means that investors can buy ahead of price growth, by finding locations where sales volumes are rising but prices have not yet moved.”