In my latest Perth Property Market Update, I take a deep look into the rental and sale market giving you my insights for what to expect in the year ahead. Watch the video update here or read the transcription below.
Here are the graphs that I refer to
If you prefer to read, here is the transcription
Hi there! Jarrad Mahon bringing you my latest Perth Property Market Update. Where I will be going into the Sale Market and the Rental Market as it sits in February right now. As well as my predictions and opportunities I see for 2014.
Current Sale Market
Coming into the start of this year, the market’s really tightened up and I was getting a bit worried at Christmas last year, we were heading up to nine and a half thousand odd listings and it was looking like the market was starting to head back to more of a neutral market. There’s a bit of a slowdown in the mining sector but we seem to have gotten over that, certainly, for the short term and things have really tightened up coming into the start of this year.
The number of sales per week has lifted right back up to levels in line with the highest number of sales we were getting in 2013, that’s clearing properties off the market. I suspect a lot of people who didn’t achieve a sale leading up to Christmas, have probably re-assessed their plans and have come off the market and there’s really no place for anything to be on the market for more than two to three weeks.
Predictions for 2014
Now this sales market is turning over very quickly. To give you a Perth wide perspective, the inner Perth market is finishing off its growth cycle and that’s now going to return to more of a neutral market this year. That market was affected a lot more by the changing mining economy. The middle ring suburbs were the stars of last year with good growth in the five to twelve kilometer radius of Perth. That growth now is starting to pull out, so, the middle to outer suburbs is where I expect the growth to be this year and while the middle ring suburbs will still tick along, the outer suburbs will likely grow with more of an sharp upswing pattern so that we’ll get six, twelve maybe eighteen months of growth and then Perth as a whole will go back to a neutral market. I expect this slowing will coincide with when the interest rates starts coming back up again.
Now, what is influencing the middle to outer suburbs to grow, is the change in the first time owners grant, increasing from seven grand up to ten thousand dollars for new houses. Where properties are priced at less than $500,000, mostly in the middle to outer suburbs that’s kicking in to compound where we’re at in the cycle.
So I’m certainly seeing all my suburb prediction reports for the outer land estates being very favorable and positive for this year. If you have got existing property in there, expect to get some growth. If you’re looking to buy a new property and you’re open to house and land packages, now is an excellent time to look at it. Try to combine that with where the most infrastructure is going in. I’ve got a couple of suburbs that I’ve got my eye on, where there’s a new train station, new commercial area, Woolworths etc. Message me if you’re looking at making a purchase with that kind of strategy.
Current Rental Market
So, looking at the rental market what’s actually come up in our stats is what we knew two to three months ago and that is that the market was softening. Where up to 3.2% vacancy rate. To give you an idea, at the start of last year we were at 1.9%, so, we’ve really softened. It’s nothing to worry about but it is just taking two weeks on average to lease a property now.
So, when we’ve got an existing tenant in there, we need to get onto it before the lease comes to an end and for anyone that’s placing a tenant for the first time, allow that 2 weeks to get a quality one.
So with the median rental price, what we’ve seen is that’s gradually been dropping from a height of $480 per week, back down to $460pw. That will be some good news for tenants.
A new stat that I am introducing into my updates is the number for rent. You can see that gradually, from September onwards, the number for rent in Perth has been increasing. We are just at over 5000 properties for rent now, so with that trend going the way it is, I expect that the median rent is going to continue to lower and our rental vacancy will continue to increase slightly month per month until we see this number for rent pull back.
Now it was difficult to find tenants over Christmas & January but everyone seems to be back from holidays settling into a new year and we are able to keep that leasing time down to less than 2 weeks.
Thanks for listening to my Perth Property update. Hope you’ve gained a bit of insight into where we’re at. And if you want some specific advice on your situation. Make sure you give us an email. I’d be too happy to help.