Perth Property Update
Statistics released by the Real Estate Institute of Western Australia (REIWA) reveal a 3.1 per cent increase inPerth’s median dwelling price to a reported $495,000 during the final quarter of 2012. This price growth is partly attributed to the increase in sales of properties in the $800,000 to $2,000,000 price range. There was also strong demand in the $350,000 to $450,000 price range during the same period, with agents noting that stock levels were low and buyer enquiry strong.
The first quarter of 2013 has shown signs of continued improvement, with sub-$600,000 properties increasing in demand as upgraders (those purchasing more expensive property) become more active and stock levels remain low. Current rental yields are in the order of five to 5.5 per cent, which means mortgage repayments are approaching parity with weekly rental payment costs, leading to a greater number of buyers in the marketplace. As a result, according to figures provided by the REIWA, the rental market softened slightly in the final quarter of 2012. However, the median rent remained stable at $450 per week, with rental demand predicted to remain strong in 2013.
Signs point to improved performance for Perth with many sectors of the market predicted to show growth in 2013. There are now approximately 9,500 properties for sale in Perth, including land. This is an estimated 30 per cent lower than the same period last year. With the long-term average being approximately 12,000, there is now a shortage of supply, which is not expected to improve throughout the course of the year. This shortage of supply has led to increased competition in the $350,000 to $500,000 price range whereby multiple offers are commonly placed on properties.
First-home buyers and investors are very active in the marketplace. In particular, suburbs Heathridge, Beldon and Craigie are experiencing strong demand due to the proposed Ocean Reef Marine Project, which will offer a range of new facilities including recreational, retail and cafe areas.
Located 25km’s north of Perth these suburbs offer a good stock of established properties under $550,000. Beldon is situated in close proximity to Joondalup city centre - the future ocean reef marina. Before buying in Beldon, buyers should assess the impact of current proposed zoning changes.
Craigie is popular among first-home buyers due to its relative affordability and offers good rental return for investors. The area is popular due to its adjacency to the rail line and its performance is supported by its proximity to higher priced neighbouring suburbs.
Buyers in these areas are anticipating the long-term benefits to lifestyle and local property performance brought about by the project. These locations provide consistent levels of available accommodation for under $500,000 and show strong rental demand.
Investors are now in direct competition with first-home buyers in areas offering sales of established properties 15 to 20 years old. Properties built in areas of Perth during the 1990’s generally have land sizes that fall between 600m² to 750m² and subsequently there is a high underlying land value in relation to the property’s value.
Brendan Aylmore, Branch Director (WA)
WBP Property Group