Hikes in house prices have always been considered good motivators and indicators of a recovering economy.
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Perth, Australia (PRWEB) April 29, 2013
A significant increase in sales of homes valued at $500,000 to $1 million helped pull up median house prices in Perth, preliminary data from The Real Estate Institute of Western Australia (REIWA) show. According to statistics collected for the March quarter, median price is now at $510,000, marking a 2 per cent increase from December quarter prices. REIWA President David Airey credits the development in huge part to the lift in sales activity of the more expensive properties, or those above the median prices.
“Hikes in house prices have always been considered good motivators and indicators of a recovering economy,” Mr. Airey says. “Strong numbers in real estate, especially for the more high-priced properties, boost financial activity significantly and lend an upbeat outlook to the local economy,” he says.
Those studying the dynamics of investing in real estate, Perth experts say, know that the actual and perceived gains of home price increases can bring a chain of benefits as it boosts the confidence of the market, particularly homeowners who will be glad to know that their properties continue to become valuable investments. Several studies, including the paper “Wealth Effects Revisited” written by Karl Case, John Quigley and Robert Shiller of Yale University, have shown how higher home prices lead to higher housing wealth, which encourages additional spending per household that in turn triggers financial activity.
Mr. Airey says the REIWA sales report indicates that flats, units, apartments and villas in the central part of Perth showed a 10 per cent rise in sales during the quarter, “suggesting an upturn with investor activity given that around half of all multi-residential property is tenanted.”
The strong sales activity during the quarter in real estate in Perth particularly suburbs closer to the CBD has likewise prompted the price spike. Mr. Airey lists Bayswater, Belmont, Bassendean, South Perth, Victoria Park and the coastal strip in the City of Stirling as “areas that are all over the general median price and as such contributed to the overall lift in the market median.”
Mr Airey, however, is quick to add that despite the recent developments that make the real estate, WA market a good place for investing, it is still highly important that investors weigh each decision carefully and arm themselves with information before making a move.
He encourages would-be buyers to utilise the comprehensive, up-to-date information regularly posted on the REIWA website and the relevant tools and technologies they offer that will help guide investors in every choice they make. “One thing that the recent global crisis has taught the average consumer is the importance of being well-informed, incisive and discriminating when it comes to choosing investments. Investing in real estate can be complex and confusing. But with the right tools and the help of experts, it can also be one of the most lucrative and rewarding,” Mr Airey says.
To take advantage of today’s upbeat real estate outlook, interested investors are invited to head over to http://reiwa.com.au now.