Welcome to my July Perth Property Market update where I give you the latest insights into the Perth House Market, Investment Opportunities & Rental market.
Watch the video here or see the transcription below
Here are the Graphs I refer to
Here is the Transcription
Hi there Jarrad Mahon from Investors Edge Real Estate bringing you my latest Perth Property Update for July. I’m gonna take you through the Sale Market, the Investment Opportunities in this Market and the Rental Market so stick with us.
Sale Market Update
Number of properties for sale has steadily increased since January when we were at our low of 8,700 properties for sale. So month per month we’ve seen a gradual increase and we’re now at around 10,700 properties on the market. We’re still in a seller’s market because we’re below 12,000 where we normally classify things going over to a neutral market.
So, there are still more buyers out there than there are sellers, but it certainly taking a lot longer to sell properties and I’m averaging about three weeks on the market at the moment. You gotta be very good with your follow up on every single buyer and work hard to create competition when the market is a little bit more soft as it is now. So make sure your agent is very proactive and gets you as much feedback as possible. So if you are not priced quiet right you can make the adjustments quickly while you’ve still got enough demand to sell before you go stale.
Now, the number of properties sold per week have gradually been dropping and we’re now averaging in the low 700 sales per week. So as more properties come on the market we’re not getting as many being cleared off and sold every week. So, all I can foresee at this point is we are going continue to gradually increase in the number of properties for sale and as we finish out our boom cycle.
Now what’s happening as far as the suburbs go, is the outer areas at the moment in the 15 to 40 kilometre radius, there’s a lot of turnover out there, anywhere that represents affordability for people is particularly popular. Now, one of the things that’s driven growth in those areas was the change to our first homeowners grant and in June that switched over to now only applying a full stamp concession to properties that are less than $430,000. And between 430,000 and 530,000 there’s a scaling to that stamp payable.
So that’s another reason for buyer interest to be focused in the more affordable areas because they will still get their full stamp duty concession when they’re buying under $430,000 and we had a huge run of buyers that were purchasing, up to June. We actually had triple the number of first home owners grants being used in May and June, people not wanting to miss out on getting through purchase at a slightly high price up to $500,000.
So, where are the best investment opportunities are in this market? It’s still a good time to look at house and land packages. I’d certainly be purchasing one over the next six months so that you can hopefully see some growth as we round out our booms cycle.
I’d be staying away from off the plan unless it’s really well located and well-priced. And with the development sites and subdivisions, I’d certainly be looking in the outer areas where you going to get some of that growth too.
What’s happening to the inner area development sites is they’ve had their growth and it’s very difficult to find anything that’s going to give you a decent enough return. And in these areas, you’re not going have as much competition but don’t expect to have growth anytime over the next two to three years. You’re going to have to wait till the cycle comes around again.
Rental Market Update
When I look over at our rental market. We’ve really been having to work hard there too. And our vacancy rate has gone up from where it was at the start of the year at around 3%. And we’re now up at 4.1% and it’s been a very gradual increase but doesn’t show signs of stopping yet, it’s still softening. And as more of the first time buyers move across and out of renting, that’s going to keep happening.
With the median rent as more properties around the market for rent, the choice is larger and the owners have to reduce their rent in order to attract their tenant more quickly. And our median rent has dropped from its high at the start of the year at $460pw, we’re now down to $450pw.
So, not a huge drop in the actual median rent but the vacancy rate is certainly gone up and its now taking us a good two to three weeks to find a tenant. The median rent might not show it but in a lot of suburbs we’re seeing reductions in rent between $20$ and $50. The CBD’s been hit the hardest and there’s reductions as much as a $100 or more per week.
We’ve seen gradually the number of properties for rent going up month by month. So, be smart when renting your property, its far better to meet the market and have more tenants to choose from, you want to be making the choice and not hoping and praying that the one tenant that’s not a quality tenant is choosing you. So, be realistic, listen to the market and make adjustments quickly and you’ll find your quality tenant in two weeks or less.
So, thanks for listening to my update. Any specific questions relating to your property, send them through. Absolutely no trouble to answer them and I wish you a fantastic rest of month. Bye!