In this months Perth Property Update I take a closer look at the state of the market, the factors influencing buyer demand, where it is strongest in the market at the moment and how to predict where it will occur.
We are officially in a “Neutral Market”
Over this last month the number of Perth properties on the market has continued to reduce and is now at 11,397 properties for sale (Source: REIWA)… making us officially no longer in a “Buyers Market” and now in a “Neutral Market”… Hooray!!
What does that mean for you?
It means that generally the market is continuing to improve and has done so since it bottomed out in May of 2011. However while the total number of properties for sale in Perth metro is decreasing, the demand from home buyers is anything but even across Perth.
We are in fact experiencing a 2 speed market where there are many suburbs that are already experiencing higher demand, limited supply and as a result strong price growth and there are those that are still going backwards. Price growth is all a direct result of supply and demand, feel free to email or call me to discuss where your individual suburb is going and a strategy to make the most of it.
What is driving buyer demand?
Buyer demand is affected by 4 main factors
- Population growth
- The availability of finance for buyers
- Relative cost of renting vs buying
- Returns available to property investors
You can see that each of these factors have been improving over the last year to increase the demand for property ownership.
WA’s population growth is the highest of all states at 14.3% since 2006!
Cost of Perth rent prices sky rockets by 76.5% over the last 4 years!
Cost of financing is now at historical lows
Where is buyer demand currently strongest?
From my observations in the market the areas of Perth that have both good affordability and strong lifestyle appeal are currently experiencing the greatest level of demand from those buyers that are directly benefiting from the mining boom.
So what makes an area have both good affordability & strong lifestyle appeal?
While there is plenty of exceptions to the below, however if all of these factors exist you are well positioned for the current buyer demand-
- Properties priced between $400,000 & $500,000
- Easy access to transport: train, bus, airport, freeway, highway
- Less than 12km of CBD
- High amenity: strip shops, cafes, healthcare, major shopping centers
You will find that the price for housing in these areas generally exceeds $500,000 so buyers are embracing higher density villa, unit and apartment living like they never have before in Perth.
Over the coming months as buyers gain the confidence to upgrade their homes, the demand will start to ripple through the market to higher pricing points.
It is possible to accurately predict suburb price growth!
Many of you would know that we work closely with John Lindeman, one of Australia’s leading authorities on housing market prediction. John’s reports have been shown to be highly accurate to 92%. They help to remove your doubts and empower you with information you need which is critical to-
- Find suburbs where prices are at their lowest and predicted to rise
- Avoid suburbs where prices are about to fall
- Know when to sell before prices drop
- Discover suburbs where rents are forecast to rise
The great news…
The great news is that we have convinced John Lindeman to feature at our 2012 Perth Property Outlook Seminar… set to be the biggest seminar of the year, coming up on Monday 20th August 2012. So if you would like the latest and most powerful information to understand and take advantage of our changing Perth market, make sure you get your tickets quickly. Click here for more information.