At Investors Edge, we keep a close eye on investment properties in Perth and WA. We know that every good decision a client makes can provide them with thousands of dollars extra over time. Conversely, we know that every bad decision can cost a client the same. Consequently, we make it our business and our mission to help clients keep the mistakes down and use research to consistently make good decisions.
We found a recent report called “Perth Housing Boom and Bust 2013/2014,” produced by SQM Research. The report makes some startling conclusions, such as the supposition that buying real estate in Perth can “only be for the brave.”
Louis Christopher, Managing Director of SQM Research, feels that Perth has already seen the largest part of its projected 5% growth for 2013, and that growth will slow in the second half of this year.
So what are the factors involved here? The report cites conflicting economic factors as fostering an environment of uncertainty. On the positive side, the RBA keeps lowering the interest rate and banks are finally passing the discounts on to home buyers. The construction sector is expected to need at least 15,000 new workers.
On the negative side, the mining industry is projected to lose at least 15,000 jobs, negating the progress made by the increase in construction jobs. The mining industry is seen as preparing to enter a slow down, which would affect other economic factors as well.
Some other predictions:
Increases in new home construction will provide more homes at lower prices.
Migration will slow down as less new jobs become available, putting a damper on WA population growth.
More rentals will be available, balancing the housing market.
The interest rate may be lowered even more, but the Australian Dollar’s recent struggles may offset any benefits and cause a delay in rate cuts.
What We think
While we agree with the tone of the report for the short-term “property flipper,” we think the outlook for long-term property investment in Perth is as good as it has ever been. There has never been a time in the history of the Free Sale Appraisal market that someone who held on to a home for 20 years didn’t make money. We don’t see it happening now, either.
Call 1300 472 427 today to learn more.