What I am seeing in the sale market
The number of properties on the Perth market seems to have stabilised over the last 3 months at just under 14,000 properties for sale, which is still a buyer’s market.
The active buyer groups in the market over the last 3 months have been families looking for 4×2’s homes in the price range of $450k-$550k and the first home buyers between $400k-$500k looking for units in inner suburbs less than 10km from Perth.
In general buyers that are looking further than 15km from the city at properties priced less than $350,000 are struggling with affordability and the supply of property in these areas is continuing to increase month on month, causing prices to soften.
How might the drop in interest rates affect the Perth Market?
With the drop of interest rates this week contrasted with ever increasing rental prices we may see some buyer demand return to this segment of the market in the coming months.
Buyers at prices above $600,000 are still thin on the ground but if demand from first home buyers increases, the demand from sellers who up-grade will extend into the higher pricing points.
As tenants move from the rental market to home ownership this will start to decrease pressure on rental prices.
Proof of life from property investors
The biggest change over the last month is that investor activity is starting to come back, where it has been virtually non-existent for the last 4 years. Investors are being attracted by the increasing rental yields and greater confidence in the Perth job market being backed by a new mining boom.
There is a combination of interstate and overseas investors in this mix, and they are being more decisive and can see the bigger picture of how well off and well positioned Perth is.
I have been asked to speak in Singapore in May at the Australian Property Symposium conference… and foreign investors are very hungry for Perth and Sydney property markets.
Will demand from investors be the tipping point?
I believe that a renewed demand from investors will be the tipping point to bring us back to a balanced market. Watch this space for updates and if you are considering a purchase don’t be left wondering what happened, arrange a strategy session with me now by contacting me on my details below.
Perth Rental market running hot!
It has only just started appearing all over the news but the rental market has been running hot for the last 4 months. We have adjusted our approach to now setting our asking price as a rental range. Typically pricing in a $40 range from where we think the market price is at. In one case over the last month we had a quality tenant pay $100 over market rental price just to secure the property, but applications at $20-30 over market price is becoming typical. Make sure your property manager is including a clause to be able to review the rent at the 6 month point of 12 month leases so that you can keep up with the market movement.
