Blog


25 June 2018
By portermathewsblog


via therealestateconversation.com.au

Many investors steer clear of vacant land because they mistakenly believe they can’t claim interest repayments on it.

Corbett-Road-Land-for-Sale-Rm-of-Springfield-2-624x403

In fact, the biggest thing that most accountants get wrong when advising clients on vacant land is that the interest component on it isn’t tax deductible.

I’ve had many arguments with many accountants about this topic over the years!

The key component is the clear intent to build a property within a reasonable timeframe. If the investor was audited, the investor would need to prove that the timeframe – whether it’s a few weeks or months – was necessary to enable to construct the investment property.

I’ve heard this ‘non-advice’ so many times over the years and that’s why it’s so important that you get advice from a property accountant with a strong understanding of the relevant legislation.

Which land is best?
With vacant land, there are a number of different strategies that you could implement.

The first one is residential land that is being carved up by a developer, but you buy before the titles for each individual block have been registered. Effectively, you’re buying land off the plan, but it’s important to understand that there are pros and cons to this strategy.

The pro is that if it’s in a high-demand area and you’ve bought during the early stages of development, you tend to make some money. You also generally only need to put down a few hundred or thousand dollars as the deposit. Naturally, because you are very much dependent on how fast the developer can register each block, you’re at the whim of the market, which can be a con. For example, in my portfolio, I once bought 18 blocks of land that were not yet registered.

In fact, registration wasn’t supposed to happen for another two years. However, it happened in just eight months and I wasn’t ready. So all of a sudden I had 18 parcels of land that I had to settle on, but I didn’t have my finance organised.

After discussing it with the developer, I ended up settling on four of them and he released the other 14 back to the market, which worked out well for him because the market had improved.

So, if the land is registered well ahead of time, you can be left scrambling.

On the other hand, if registration takes longer than expected, the market could have slowed down. Like any off-the-plan project, you only need one bad valuation to negatively impact
the entire subdivision or development. Plus, everyone will be building at the same time, which means you’re competing for trades and will likely be finished at the same time, too, and that means a strong likelihood of softer prices.

What about greenfield and infill sites?

When I say greenfield sites, I mean blocks of rural land that you intend to rezone for residential usage. Now this is a strategy for more advanced investors because there is more risk as well as a higher financial component required for earthworks and approval costs. Greenfield sites can be bought for an affordable price, but if you can’t get the subdivision approved you need to have the money behind you to fight all your way up to the Environment Court if necessary.

A better strategy is to target infill sites within already established residential areas.

In this scenario, you buy a larger block of land, usually with a house on it, to carve off the land at the back or the side to sell as vacant or with a new property on it.

The other option is to subdivide, then construct a new dwelling and then keep both. Infill developments can also lean towards knocking the old house down, splitting the block into two and selling the vacant land, or building two houses or even multiples. It must always come back to whether there is a market for your project and whether the numbers add up, because you must take into account all of the costs on the way in and on the way out.

That way you can make an educated decision whether to keep holding long term or take your profits to invest elsewhere.

Whichever strategy you choose, you must do your figures on the worst-case scenario to see if it adds up. That’s because land generally has a lower, or no yield to start off with, which means your holding costs can be higher than with a house, for example.

At the end of the day, vacant land as a strategy, does work. You just need to have your eyes wide open to ensure your figures are correct and you must understand that it might be a while before income rolls in.

Finally, it goes without saying that you must get tax advice from a specialist accountant who understands  property. If you don’t, you could end up with pockets just as vacant as the land you’re investing in.

 

Comments (0)

18 June 2018
By portermathewsblog


via therealestateconversation.com.au

Buying and selling property in WA has traditionally been by way of a conventional private treaty arrangement, however buyers and sellers are missing out on a more pure form of transaction, and that’s the auction.

property

Granted, auctions are becoming a more accepted selling method and the numbers of weekly auctions in WA has increased significantly over the past five years, but still lag a long way behind private treaty sales and the Eastern states. So why is that we’ve been slow to jump on the auction bandwagon?

Firstly, WA’s law for property transactions using the current “Offer & Acceptance” method protect both buyer and seller and in the majority of cases are easy to follow.  The system works effectively for all parties to the transaction including the buyer, seller, settlement agent/conveyancer and banks. The downside of this system is that is can be time consuming and in many cases is conditional upon buyers obtaining finance, property inspections, having to sell their current home, etc.

More importantly, the system has a major flaw in it and that’s the asking price is disclosed and typically buyers knock the price down to where they feel comfortable – so it’s not good for sellers.

So why should we look to auctions? The auction system is the most pure form of selling and buying as there are no “secrets” surrounding price or selling terms; all terms are provided in the marketing campaign and the buyers set the price on where they see value.  Selling by auction in most cases is quicker than private treaty. And the seller has three bites of the cherry; sell before auction day, on auction day or usually within 30 post auction day.

There are two main misconceptions surrounding auctions:

1. They cost too much. The cost of the auction is merely the auctioneer’s fee for calling the auction and working with the seller, buyer and agent to achieve the desired result. Typically, an auctioneers’ fee is in the vicinity of $700 to $1000. All other costs are associated with the marketing campaign to promote the property.

2. Auctions only “work in expensive areas”. That’s just a suburban myth. There’s many examples of properties below the current Perth median price of $510,000 selling at auction.

WA is one of only two states, the other being Tasmania, that don’t have a cooling off period in our property contracts.  A cooling off period allows the buyer to “break” the Offer to Purchase usually between 2 to 5 business days after the offer has been signed. In other words, if the buyer changes their mind for whatever reason they can legally break the offer and walk away for a very small consideration to the seller, usually between 0.2% – 0.25% of the purchase price.

As WA doesn’t have cooling off provisions in our property contracts, this makes it far too easy for sellers and agents to default to Private Treaty transactions. If cooling off provisions were introduced to our property contracts, I’d predict a huge increase in the number of property auctions taking place in WA.

Finally, too few real estate agents embrace auctions and the auction process with vigor. They lack confidence and in some cases, the ability to explain the different marketing options available to sellers and automatically default to Private Treaty. This is a marketing injustice to sellers and the sooner we can demystify and legitimise the auction process for both buyers and sellers, the better.

Comments (0)

06 June 2018
By portermathewsblog


via reiwa.com.au

The latest REIWA Curtin Buy-Rent Index for the March 2018 quarter has revealed it’s the best time to buy in Perth since 2013.

The Index, released quarterly, assesses whether it’s better to buy or rent in Perth based on past and current trends in the economic and property market climate.

REIWA President Hayden Groves said the March 2018 quarter index showed the annual rate of house price growth required over 10 years to break even in the Buy-Rent Index had declined from 3.3 per cent to 3.1 per cent over the quarter, suggesting an improvement for prospective homebuyers weighing up the decision.

“To put that into perspective, Perth’s annual house price growth rate has been 5.9 per cent for the last 15 years. Based on the March 2018 quarter Index, house prices in Perth would only need to grow by more than 3.1 per cent annually for buying to be considered more financially beneficial than renting,” Mr Groves said.

“This improvement in buying conditions can be attributed to the Perth median house price softening by 1.9 per cent during the March quarter, while the median house rent price increased $5 to $360 per week. We also saw the 10 year average mortgage rate drop to 6.43 per cent, which means home owners are paying less on their mortgage repayments.

“This is the most affordable buying environment we’ve seen in Perth for some time, so if you’ve been weighing up whether to buy, now is the time to take advantage of favourable market conditions,” Mr Groves said.

Mr J-Han Ho, a Property Researcher and Senior Lecturer in the School of Economics and Finance at Curtin University, said the data indicated a continued improvement for the home buyer in the near future.

“Our analysis shows home buyers gaining an advantage, largely due to the low interest rates for home loans, home ownership costs continuing to be affordable and the median rents stabilising,” Mr Ho said.

View the March 2018 quarter Buy-Rent Index.

Comments (0)

21 May 2018
By portermathewsblog


via reiwa.com.au

First home buyers are active in Perth’s property market, with data for the March 2018 quarter revealing an increase in sales for properties priced $500,000 and below.

REIWA President Hayden Groves said after observing subdued first home buyer activity during the December 2017 quarter, it was pleasing to see the lower end of the market strengthen early in 2018.

“The final quarter of 2017 saw the composition of the Perth market shift. Last quarter there were significantly more sales in the higher priced end of the market and less in the first home buyer price range. It’s been a different story this quarter, with the balance of sales shifting back to the lower end of the market,” Mr Groves said.

Median house and unit price

Perth’s preliminary median house price is $510,000 for the March 2018 quarter.

Mr Groves said once all sales settle, this figure was expected to increase to $517,000, which would put the March 2018 quarter median marginally lower (by 0.6 per cent) than the December 2017 quarter.

“Although Perth’s median house price experienced a minor adjustment during the March 2018 quarter, the median house price is up 0.4 per cent when compared to the same time last year, which shows prices are stable,” Mr Groves said.

Perth’s preliminary median unit price is $401,000 for the March 2018 quarter.

“This is expected to lift to $410,000 once all sales settle, which would put it equal with the December quarter median.

“These results are in line with REIWA’s 2018 forecast, which expects stable conditions throughout the remainder of this year, with moderate price growth during the next 12 months,” Mr Groves said.

Sales activity

Preliminary Landgate data shows there were 5,865 dwelling sales during the March 2018 quarter.

“We expect around 6,603 sales for the quarter overall, which is marginally lower than volumes recorded during the December quarter,” Mr Groves said.

There was a 5.7 per cent increase in house sales in the sub-$500,000 price range during the March 2018 quarter.

“Increased activity in the lower end of the market is usually a sign first home buyers are active. We are fortunate the dream of home ownership is more attainable for West Australians than it is on the east coast. After seeing activity drop off last quarter, it’s good to see first home buyers are increasing their presence in the market,” Mr Groves said.

Listings for sale

There were 14,413 properties for sale in Perth at the end of the March 2018 quarter.

Mr Groves said listings had increased 10.2 per cent over the quarter, but were down 2.9 per cent when compared to the March 2017 quarter.

“While it is pleasing listings have declined on an annual basis, the increase over the quarter is not cause for alarm. With overall sentiment in WA improving and all signs indicating the market has begun to turn, sellers are feeling more confident than they have been and therefore more inclined to put their property up for sale.

“We’ve also seen a sharp decline in rental listings over the past year which has had a flow-on effect to the established market. With some investors choosing to sell their rental property instead of lease it, this has contributed to the rise in the number of properties for sale in Perth,” Mr Groves said.

Average selling days

It took 67 days on average to sell a house in Perth during the March 2018 quarter.

Mr Groves said although average selling days increased over the quarter, it was still two days quicker to sell than it was during the March 2017 quarter.

“With more listings on the market, buyers now have more choice, which has had an impact on the time it takes to sell. It’s very encouraging though, that on an annual basis, we’re seeing average selling days decrease,” Mr Groves said.

Comments (0)

14 May 2018
By portermathewsblog


via reiwa.com.au

With steady rents, declining listings, improved leasing figures and faster leasing times, data for the March 2018 quarter reveals Perth’s rental market is leading the charge in Perth’s property market recovery.

REIWA President Hayden Groves said the first quarter of 2018 showed Perth’s rental market had strengthened, with improvements recorded across all key indicators.

“Perth’s rental market appears to be building on the momentum of the latter half of 2017, which is very encouraging – not just for the rental market, but also for the overall property market. Historically, the sales market follows the rental market during a recovery,” Mr Groves said.

Median rent prices

Perth’s overall median rent price is $350 per week for the March 2018 quarter.

Mr Groves said this was the twelfth straight month of stable rent prices, with no changes recorded since April 2017.

“All sub-regions experienced stable median prices except for the South West sub-region, which saw its overall median rent price increase $10 to $330 per week during the quarter,” Mr Groves said.

reiwa.com data shows there was a $5 per week increase to both the median house and median unit rent during the March 2018 quarter.

“The median house rent increased to $360 per week, while the median unit rent increased to $325 per week,” Mr Groves said.

“It bodes well for landlords that the house and unit median rents are improving simultaneously.”

Leasing activity

There were 14,112 rental properties leased in Perth during the March 2018 quarter.

“Leasing volumes for the March 2018 quarter are up 4.2 per cent compared to the December 2017 quarter,” Mr Groves said.

“Four out of the five sub-regions saw an improvement in leasing volumes, with the Central sub-region (up 7.7 per cent) and North East sub-region (up 6.1 per cent) the stand-outs.”

At a suburb level, reiwa.com data shows East Cannington, St James, North Fremantle, Ellenbrook and Booragoon saw the biggest growth in leasing activity levels over the quarter.

Listings for rent

Rental listings declined 4.5 per cent during the quarter, with 8,508 listings recorded at the end of March 2018.

Mr Groves said there had been a substantial reduction in the number of rental properties available in Perth over the last 12 months.

“Compared to the March 2017 quarter, listings for rent are now 18.6 per cent lower than they were at the same time last year. This can be attributed to an increase in population growth to the state and fewer new dwelling commencements occurring in the metro area,” Mr Groves said.

Average leasing time

It was two days faster to lease a property during the March 2018 quarter than it was during the December 2017 quarter.

“It took 47 days on average for landlords to find a tenant during the March quarter, which is two days faster than the December quarter and three days faster than the March 2017 quarter,” Mr Groves said.

“With stock levels declining and leasing activity increasing, the Perth rental market is finally starting to re-balance. For tenants, now is a good time to secure a longer-term lease before rents rise.”

Comments (0)

23 April 2018
By portermathewsblog


via domain.com.au

In Australia’s perpetually crowded rental market, the odds of securing any sort of home – let alone one that ticks all your boxes – can seem daunting.

Fast-increasing prices and the advent of so-called “rental bidding” further complicate the picture. And during the summer months, fluctuations in stock can create wildly variable conditions from week to week.

But there is reason to be optimistic. Despite perceptions that the rental market is somehow rigged – particularly in large cities such as Sydney and Melbourne – agents and advocates say that ordinary Aussies stand a good chance of renting in 2018.

Consider house-hunting in early January when there is less competition.Consider house-hunting in early January when there is less competition. Photo: Edwina Pickles

If you understand what landlords are looking for, are willing to take care during the application process and choose the most appropriate month to search, you might be surprised by what you can secure.

1. Always write a cover letter

Few agents ask for one, but including a cover letter with your application can dramatically improve your chances of securing a rental.

Crucially, a one-page cover letter can find its way to the landlord, who is almost never present at inspections but has final say over who is granted the lease.Making a personal connection with the landlord through a cover letter can be very valuable.

Make sure you have all your documentation ready before the inspection.Make sure you have all your documentation ready before the inspection. Photo: Pat Scala

“Make it a good story,” says Eileen Carroll, sales director of Ray White Glebe. “Tell us why you’re the best person for the property. A little story about yourself will help your cause.”

2. Gather everything you’ll need – and then some

While some agents do not require additional documentation such as proof of ID and written references to be supplied at the time of application, Carroll says prospective tenants should submit these documents anyway.

“Have it all ready, so if you are accepted, you can actually secure the property,” she says. “If I’m chasing people for these documents before they’ve even signed the tenancy, alarm bells start to ring.”

Agents may move on to the next applicant if you don't have your deposit ready.Agents may move on to the next applicant if you don’t have your deposit ready. Photo: Dan Soderstrom

Providing ample references and other documents from the outset can also give you an advantage over less organised applicants.

“If someone submits an application with just a payslip from a month ago and a passport, it’s not really that interesting to me,” Carroll says. “But if the application has a covering letter, two current payslips, a personal or work reference and they’ve completed their 100 points of ID, I’m impressed.”

3. Apply online if you can

Scanning your hard-copy documents and completing an online application form may be irksome and time-consuming, but for agents it’s a godsend.

Even if a property is popular, don't be tempted to pay more than the advertised price.Even if a property is popular, don’t be tempted to pay more than the advertised price. Photo: Eddie Jim

“I had eight properties open two weeks ago and I leased all of them,” explains Carroll, “so the paperwork was miles long. Online applications make my life easier.”

Most online application forms also include a section for additional comments, so make sure you use it. “The standard form we use actually asks applicants to explain why they like the property in question, and I find that really helpful,” Carroll says. “It’s the first thing I go to now in the application because it gives me a better indication of who we’re dealing with.”

4. Think carefully before offering more than the listed price

Australia’s chronic shortage of inner-city housing has led to an increase in so-called “rental bidding”: offering more than the asking price in order to beat out the competition.

Leo Patterson Ross, advocacy and research officer at the Tenants Union of New South Wales, concedes that this strategy can be effective for those who can afford it. But he cautions that rental bidding can set a dangerous precedent.

“It’s pushing up prices not only for others but for yourself,” he says. By indicating a willingness to pay more than advertised, tenants may increase the likelihood of further rent rises in future, which could ultimately make the property unaffordable.

5. Be ready to pay your deposit

Having your application approved does not guarantee that the agent will hold the property for you. “If I call someone in the morning, tell them their application has been approved and ask for their deposit, and they say, ‘Oh, I’ll pay it later this afternoon’, I automatically go to the next application,” says Carroll.

“If they’re going to pay it later that afternoon, that tells me they’re waiting on the outcome of another application or they can’t afford my property.”

Carroll says delaying payment of your deposit by even a few hours can be risky. “I don’t want to lose my other applicants waiting for a deposit to be paid. Waiting a day for the deposit could mean my other applicants have moved on to other properties.”

6. Choose the most suitable month to apply

Unlike most of the year, when the number of properties on the Australian rental market is relatively stable, the months of January, February and March vary wildly in terms of volume.

According to Domain data, rental listings are at their lowest levels between late December and late January, when much of the country is on holiday. But some rental properties are open for inspection during this time.

Carroll says house-hunting in quiet early January can mean less competition and a better chance of striking up a relationship with a rental agent.

If you’d like to maximise your options, wait until late January or early February, when many landlords return from holidays. But remember that university students house-hunt during this time, increasing competition in less expensive suburbs.

If you can afford to wait until March, you’ll find the market returning to normal levels – and there may be an opportunity to pick up a bargain rental that didn’t lease during the February rush.

7. Don’t despair if you are young or haven’t rented before

Many prospective tenants assume that age and wealth trump all other considerations in the eyes of agents and landlords. But the truth is more nuanced.

“Real estate agents and landlords are ultimately trying to assess risk when choosing applicants,” says Patterson Ross. “The factors they are mainly considering are the ability to pay the rent, and the likelihood of damage occurring to the property.”

“A previous rental history is part of demonstrating that you represent a lower risk, but you can do this in other ways as well – most likely character references from employers or other people who can talk about things like your responsibility, cleanliness and so on.”

Carroll says she has rented properties to people without employment who could demonstrate significant savings, and to others who had less money than their competition. “For me, it’s ultimately about whether the application stands out or not,” she says.

Comments (0)

19 March 2018
By portermathewsblog


via domain.com.au

Getting your foot into the door isn’t cheap, but sometimes it’s where the money is spent that comes as a shock to first-home buyers.

It’s not over once the deposit has been saved and the winning offer made. Experts have identified five areas where hidden costs might be lurking, and how a buyer can avoiding paying more than they need to.

1. Pre-purchase research

Anna Porter, a property valuer and principal at strategic property investment company Suburbanite, said budgeting for pre-purchase inspections is important.

“There’s a whole range of reports you can get – you can spend $5000 just on due diligence,” she said.

 What could look like a minor issue may cost more in the long run.
 What could look like a minor issue may cost more in the long run.Photo: Erin Jonasson

Not doing the research can prove costly. Mortgage Choice CEO John Flavell said it was vital to conduct proper pest and building inspections.

“It is a small amount to pay for peace of mind and it can help you to avoid buying a property with structural faults or insect infestations,” he explained.

CM Lawyers head conveyancer Alex Sapounas said that trying to avoid buying quality building reports was also a common error.

“Unfortunately there’s no fallback position with major structural flaws.”

Strata reports were also very important, he said, particularly regarding special levies and changes to the standard bylaws.

 

2. Conveyancing fees

Some first-home buyers are surprised to discover they need to engage a conveyancer, or are alarmed by the price.

Rules around conveyancing vary from state to state, but Mr Sapounas said first-home buyers should be talking to a conveyancer at the start of the buying process.

Mr Sapounas said some buyers didn't even have the contracts reviewed prior to bidding at auction.
Mr Sapounas said some buyers didn’t even have the contracts reviewed prior to bidding at auction.

He said it was common to see first-home buyers making mistakes that could cost far more in the long run than the $1500 to $2000 conveyancing fee.

Many did not understand the difference between pre-approval and actual approval, how much of a deposit they need, and when they could pull out of the purchase of a property.

“A lot of first-home buyers don’t even have the contract reviewed prior to auction,” he said.

3. Government and bank fees

Mr Flavell identifies stamp duty, the property transfer fee, and mortgage registration fee as government costs new buyers need to know about.

When it comes to home loans there’s the loan application fee, ongoing bank fees and the lender’s property valuation to consider.

A slowing market might impact whether on not a buyer opts for LMI, or a 20 per cent deposit.
A slowing market might impact whether on not a buyer opts for LMI, or a 20 per cent deposit. Photo: Dominic Lorrimer

Another potential expense is Lender’s Mortgage Insurance – LMI – which protects the lender from losing money if the borrower defaults on their loan, and the sale of the property doesn’t cover the money owed.

Generally, it’s a condition of borrowing with less than a 20 per cent deposit, and the cost can be included in the loan amount.

Analysis from financial comparison site Canstar shows that first-time buyers who opt for a 10 per cent deposit and LMI as opposed to taking longer to save a 20 per cent deposit could also wind up paying more overall.

It depends on the growth in property values, with 3.83 per cent annual growth being the break-even point for a $500,000 purchase. If growth is slower, buyers could be better off saving the 20 per cent deposit, but if the market moves faster, LMI is outweighed by capital gains.

Capture

4. Moving in, and moving tenants in

Ms Porter said first-time investors often don’t plan for professional cleaning fees.

“When a vendor moves out, there’s not a requirement for how clean the apartment has to be,” she said.

If the property is left in a passable condition, but not clean enough to meet the standards of a rental property, it might require a professional cleaner, and a $500-plus outlay.

Dixon Advisory’s head of advice Nerida Cole explained there could be quite a big “gap in expectation” for new buyers, in terms of what they’re prepared to live with compared to what a tenant expects.

“If you want to have a good tenant, you want to make sure property is presented well.”

When a vendor moves out, there's not a requirement for how clean they need to leave the property.New homeowners may be left to foot the cleaning bill when the vendor moves out. Photo: Steven Siewert

She added that the early period can be a pressure point for investors who expect to receive rent straight away.

“There can be a bit of a delay in the cash flow coming in from the rent. Up front there’s the property manager costs, the campaign to get a tenant – but you are paying interest from day one.”

Owner-occupiers also need to manage expectations and expenses. “It might take you two years to furnish the house properly, rather than racing in and trying to make it look like a Vogue magazine.”

5. Landscaping and repairs

Ms Porter recommends keeping aside $4000 for $5000 as a maintenance slush-fund.

“You can buy a property and suddenly the hot water dies, or the airconditioning dies and you have to replace it,” she said.

Ms Cole said the cost of upkeep for a backyard can come as a surprise for buyers upgrading from an apartment.

“Plant trimmers, lawnmowers, it does add up. When you’re a new home buyer, you don’t have much cash up your sleeve.”

There can be some surprises in moving from an apartment to a free-standing house with a backyard.

There can be some surprises in moving from an apartment to a free-standing house with a backyard.

Landscaping can also be costly, especially for new builds. Ram Venkatagiri, from Financial Quotient, says that the price of structures like retaining walls can come as a shock to some buyers.

“Sometimes they cannot be determined by the builder at outset, until they perform site works after the building contract has been entered into,” he said.

He noted that blinds, curtains and security grilles aren’t always included in the price of a house and land package, adding thousands to the overall cost.

 

 

Comments (0)

12 March 2018
By portermathewsblog


via reiw.com.au

Perth’s vacancy rate has dropped to 5.3 per cent – the lowest since July 2015.

REIWA President Hayden Groves said Perth’s latest vacancy rate for January 2018 had improved significantly since June 2017.

“It’s quite remarkable to see it this low considering seven months earlier Perth’s vacancy rate soared to 7.3 per cent – the highest we have ever experienced, and now it’s back at levels last seen in 2015.

“The vacancy rate is a good indicator for how the entire rental market is tracking, with reiwa.com data for February showing stable rent prices and declining listing levels. Leasing activity did drop off in February, however levels are still healthy and trending above long term averages,” Mr Groves said.

The reiwa.com vacancy rate is compiled using data obtained from a monthly survey of REIWA members. The survey details how many rental properties members manage and how many of those are vacant.

Mr Groves said there were a number of factors that had contributed to lowering the vacancy rate, such as an increase in population growth and a reduction in average tenure time.

“Population growth in WA has started to improve. Rental markets always feel the effects of population trends, with new entrants into the state the first to soak up rental stock.

“Tenants are also moving more frequently. In 2014 for example, the average tenure time was 45 months, fast forward to 2017 and it’s now 34 months, which is almost a full year less. This has led to an increase in leasing activity which has driven demand for rentals and had a positive effect on the vacancy rate.

“Another contributing factor is the reduction in the number of new dwelling commencements across the Perth Metro area. This has played an important role in lowering the vacancy rate. With less new dwellings coming onto the market, existing rental stock is now being soaked up, which is why rental listings have declined 19 per cent over the last year.

“After a challenging few years for landlords and investors, it’s pleasing to see some parity return to the rental market, with tenants and landlords seeing benefits simultaneously,” Mr Groves said.

Comments (0)

13 February 2018
By portermathewsblog


via www.domain.com.au

More Perth properties may soon be sold under the hammer.More Perth properties may soon be sold under the hammer. Photo: Peard Real Estate

With the Perth property market in a state of recovery, agents are predicting auctions will rise in popularity in favour of the traditional offer and acceptance sales method.

While latest Domain Group auction data revealed there were 180 auction listings in Perth in November, with a clearance rate of 30 per cent — in comparison to Sydney data for the same month of 4,187 listings with a clearance rate of 55 per cent — there were signs more homes will be sold under the hammer in Perth in 2018.

Domain Group data scientist Nicola Powell said a seasonality effect was obvious when looking at auction data for Perth, where there tended to be more homes for auction in the spring months.

Auctioneers expect to be busier in Perth this year.Auctioneers expect to be busier in Perth this year. Photo: Dan Soderstorm

She said auctions were ingrained in the Sydney and Melbourne vendor market, and as the Perth property market began to recover, auction conditions might improve.

JLL buyers advocate Lachlan Delahunty said “auction” seemed to be a foreign word in WA.

“However, we should start to get comfortable with the process, as it will soon hit our shores,” he said.

“Properties sold under the hammer signify only three per cent of Perth property. Unfathomable when comparing that to the likes of Melbourne and Sydney with clearance rates of 80 to 90 per cent.

“Hot markets attract auctions – like bees to honey, as we have seen in Sydney in the early stages of last year.

“However, this form of selling is certainly no place for a soft market, which Perth has experienced in recent years, recording clearance rates as low as 30 per cent in the final parts of 2017.”

Mr Delahunty predicted if the WA market continued to improve during the first few months of this year, properties in coastal and blue chip suburbs would start to see the benefits of a bidding frenzy.

LJ Hooker national auction manager David Holmes said auction volumes in Perth remained steady and almost unchanged: 1973 in Perth last year, compared to 1964 in 2016.

“Perth is still a long way off the auction volumes of the eastern states – Melbourne recorded more than 50,671 auctions last year (a 19 per cent increase year on year) with Sydney notching 40,281 (a 16 per cent increase),” he said.

“However, at the end of 2017 and already in 2018, our offices have fielded more inquiries from sellers about the opportunities to auction their properties. LJ Hooker Kalamunda Foothills auctioned four times as many properties in 2017 than they did the previous year and expect to hold even more in 2018.

“Data has indicated a shift in the Perth market, with the first positive price recorded in the last quarter for a long time. When markets begin to recover, that’s when auctions rise in popularity as buyers openly compete to determine what new market value is.”

Rob Druitt, First National Real Estate Druitt and Shead principal and auctioneer, said auctions were on the rise in Perth, with buyers becoming more savvy in their understanding of the process.

“It’s unlikely in the short to medium term that we will catch up to the like of Melbourne or Sydney, however, as our market improves we are likely to see more auctions,” he said.

Mr Druitt said there were many benefits to selling and buying at auction.

“For the sellers, it is a quicker sale process and if the property is worth more than we all think, they will achieve it,” he said.

“For the buyers, in what is becoming a more competitive market place for certain types of properties, if they are organised, they have a genuine opportunity to buy the property in an open fair forum as opposed to properties selling off the market or quickly with multiple offers.

“For the market, it is good as it helps to genuinely set the market value of property and provides immediate feedback to the market on sales evidence and interest.

“Also, if the property doesn’t sell on the day of auction it will come on the market post-auction and is available to conditional buyers.”

Acton auctioneer Boyd Fraser said the benefits of auctions included a compressed campaign for 21 days and a 50 per cent chance of selling under the hammer on the day.

“Both buyers and sellers are in the same forum so transparency in the process is guaranteed. There is a significant difference in the number of days on market,” he said.

Western suburbs were popular areas for auctions, but other standout areas included Spearwood, Hamilton Hill and Coogee, Mr Fraser said.

Comments (0)

08 February 2018
By portermathewsblog


via hartpartners.com.au

Parliament has passed the legislation allowing first home buyers to save for a deposit inside superannuation through the First Home Super Saver Scheme (FHSSS) and also allowing older Australians to ‘downsize’ and then contribute the proceeds of the sale of their family home into superannuation.

From 1 July 2018, a first home buyer will be able to withdraw voluntary superannuation contributions they have made since 1 July 2017(up to $30,000 each, with individuals being able to contribute up to $15,000 a year within existing caps), along with a deemed rate of earnings, to help buy their home.

Also, from 1 July 2018, when Australians aged 65 and oversell a home they have owned for at least 10 years, they may contribute up to $300,000 from the proceeds into their superannuation accounts, over and above existing contribution restrictions. Both members of a couple may take advantage of this measure, together contributing up to $600,000 from the proceeds of the sale into superannuation.

Comments (0)

30 January 2018
By portermathewsblog


Author: REIWA President Hayden Groves via reiwa.com.au

After a solid couple of years of subdued conditions in the Perth property market, we can look back on 2017 as a transitional period that brought about the bottom of the market.

Coming off the back of a very soft 2016, the Perth property market regained its foothold in 2017, with stable listings, sales and median house price levels observed.

The stability we are now witnessing across key market indicators is a welcome change.

What to expect in 2018

The forecast for 2018 is that the Perth market will moderately and steadily improve, however REIWA cautions against expectations of rapid growth in either the established housing or rental markets over the coming year.

In 2017 there was an average of 489 property sales recorded each week, which REIWA forecasts will lift to approximately 500 sales per week over the next six months. If sales volumes continue to trend at current levels, listing volumes will begin to fall, creating upward pressure on prices as demand builds.

We saw listings for sale start to level out and decrease last year, peaking at just over 15,000 in early 2017, before reaching a low of just over 13,000 in September.

With new dwelling activity set to decline in 2018, REIWA forecasts the number of properties for sale in Perth to remain at current levels over the next year, a level commensurate with market parity.

Perth rental market

Perth’s rental market also appeared to turn a corner in 2017, with listings declining from 11,000 in January to just over 9,300 by December.

Over this same time, leasing activity levels were strong, with approximately 1,180 rentals leased each week. If this trend persists, the balance between supply and demand of stock will continue to improve in 2018.

In a welcome change for investors, Perth’s median rent price has stabilised at $350 per week since April last year. While we don’t anticipate there will be significant growth to median rent prices in 2018, they’re not likely to fall either with quality family homes in particular in strong demand.

The Perth market is no longer experiencing significant declines in median house and rent prices, nor are we seeing listings for sale and for rent increasing at the rate they once were.

As market conditions improve and confidence returns, competition among buyers will inevitably increase.

If you’re thinking about purchasing your first home, trading-up or investing in property, my advice is to act sooner rather than later and take advantage of the stable and favourable market conditions.

To discuss your valuable investment with our Business Development Manager Sarah Morgan, give us a call on 9475 9622

Comments (0)

16 November 2017
By portermathewsblog


Housing affordability remains a hot button issue across the nation, and rightfully so. It’s a significant concern for a growing number of West Australians, particularly those on low and very low incomes, many of them facing the prospect of never being able to afford a home of their own.

Housing affordability has improved in WA

Despite this growing issue, house prices in WA have become more affordable over the last couple of years and have not increased at the rate they have in other states over the past decade. For example, Perth’s median house price for the year to June 2017 was $520,000, which is only approximately $60,000 more than it was at the same time in 2007.

By comparison, the Sydney housing market has seen its median house price increase by a staggering $600,000 over this same period, making it substantially more difficult for first home owners to enter that market market.

We are fortunate the dream of home ownership is still very much attainable in Western Australia. In fact, REIWA analysis shows it’s more financially attainable to be a home owner in 2017 than it was in 2007, with West Australians now spending a smaller percentage of their total income on mortgage repayments than they did a decade ago.

Specifically, home owners were spending approximately 56 per cent of their total income on mortgage repayments in 2007, whereas today that figure has reduced to 27 per cent. This improvement in affordability for WA home owners can largely be attributed to average income levels having increased since 2007. At the same time interest rates have gone down and house prices have remained relatively on par.

Perth property market appears to have stabilised

Home buyers remain in a strong position in Perth, but the signs do indicate the local property market has stablised.

Since July 2017, reiwa.com’s monthly data has revealed steady figures across a number of key indicators, such as median house price, median rent price and listings for sale and for rent. Historically, one of the strongest indicators a property market may be on the cusp of ‘turning’ is a period of stability.

Now is the time to buy

If you’ve been holding off making a property purchase because you’re waiting for the ‘bottom’ of the market to buy at the lowest possible price, I’d advise you to take action sooner rather than later. We don’t usually have the luxury of calling the ‘bottom’ of the market until we have the benefit of hindsight; meaning, we’re not certain the market has turned until it’s on the way back up.

With improved house prices, record low interest rates and a healthy supply of stock to choose from, now is the time to take advantage of Perth’s favourable buying conditions.

Comments (0)

31 October 2017
By portermathewsblog


Peter Williams via thewest.com.au

Billionaire Kerry Stokes has added his weight to the view that conditions are ideal for entering the housing market, staking his reputation on now being the best time to take the plunge.

The Seven Group Holdings and Seven West Media chairman said the situation came as the State showed it was recovering from the shock of miners cutting their costs by a combined $10 billion in recent years.

“Right now any young person out there, any apprentice, worker, tradesman — the best thing they’ll ever do in their life is walk out this weekend and buy a home in Western Australia,” Mr Stokes told a WestBusinessLeadership Matters event on Tuesday.

“With interest rates low, housing prices low, this is the time to think of their future right now. I’d put my reputation on the fact this is the best time for them to do that,” he said.

“If that’s the case and everybody else agrees with that, then we’re past the bottom.”

Mr Stokes’ remarks follow Housing Industry Association figures showing affordability in WA had improved dramatically, in part because of national efforts to tighten bank lending standards for investors.

In the past two years, loan repayments on a median-priced house in Perth fell by more than $260 a month, or $3120 a year. Elsewhere in WA, they fell to $1545 from $1773 a month.

Kerry StokesKerry StokesPicture: The West Australian

However, a report yesterday showed Perth had the nation’s second-most expensive residential land prices at $730 per square metre, a 5 per cent gain over the year to June. The Housing Industry Association-CoreLogic Residential Land Report said land prices rose by 19.6 per cent in Melbourne and 9.8 per cent in Sydney.

Mr Stokes said the State’s economy was showing signs of improvement after miners’ efforts to improve efficiency had contributed to the downturn.

Leadership Matters Lunch with The West Australian: Country Chair for Shell Australia Zoe Yujnovich. Photo by Michael Wilson, The West Australian.Leadership Matters Lunch with The West Australian: Country Chair for Shell Australia Zoe Yujnovich. Photo by Michael Wilson, The West Australian.
Ben WyattBen WyattPicture: The West Australian

“So when they’ve saved some $10 billion in costs that’s supposed to come out of workforces in WA. That’s a shock we have to get over and we’re actually getting over it now.”

WA Treasurer Ben Wyatt told the event that competition in the retail gas market had largely offset the increases the McGowan Government had imposed on electricity tariffs.

Discounts of up to 30 per cent are on offer with new player Origin Energy this month, joining AGL, Kleenheat and Alinta in the gas price war.

At the Leadership Matters event are WA Newspapers Group Business Editor Ben Harvey, Treasurer Ben Wyatt, Rob Scott (Wesfarmers), Zoe Yujnovich (Shell), Tom O’Leary (Iluka) and Kerry Stokes. Pictures: Michael WilsonAt the Leadership Matters event are WA Newspapers Group Business Editor Ben Harvey, Treasurer Ben Wyatt, Rob Scott (Wesfarmers), Zoe Yujnovich (Shell), Tom O’Leary (Iluka) and Kerry Stokes. Pictures: Michael WilsonPicture: Pictures: Michael Wilson

Mr Wyatt said that situation could last until the early 2020s.

Incoming Wesfarmers chief executive Rob Scott said while the loss of disposable income and lower population had hit retail businesses hard, there was cause for optimism.

“We still see opportunities,” Mr Scott said. “We see a good path for growth.”

Comments (0)

10 October 2017
By portermathewsblog


via reiwa.com.au

The McGowan Government has handed down its 2017-18 State Budget and has listened to the concerns of the WA property industry by not meddling with property taxes.

In the Treasurer’s speech, the Hon. Ben Wyatt MLA advised the State Government did not consider increases to property taxes for WA residents as part of their Budget repair measures, recognising the impact of the three consecutive land tax increases in previous Budgets.

REIWA Deputy President Damian Collins said given the McGowan Government had faced challenges when it came to the State’s fiscal position, it was pleasing to hear there would be no increases to property taxes for WA residents.

The Government is planning to introduce a four per cent foreign owner duty surcharge on purchases of residential property by foreign individuals and entities from 1 January 2019. This is expected to create $49 million in revenue by 2020-21.

“The introduction of a new foreign owner duty surcharge could hinder overseas property investment. Despite foreign investors only representing a small proportion of the WA property market, caution must be placed to ensure this section of the market does not reduce further.

“The Government expects to create revenue from this surcharge, however, it may only worsen the situation in terms of transfer duty revenue, as potential foreign investors may be less incentivised to purchase residential property in WA,” said Mr Collins.

In its pre-budget submission, REIWA recommended the Government introduce five key areas of reform:

  1. Make no further changes to rates or thresholds for land tax.
  2. No increase to transfer duty rates or change thresholds.
  3. Undertake a state tax review to assess the viability of a shift to a broad-based land tax system that ultimately removes transfer duty.
  4. Maintain the existing transfer duty exemption for first home buyers at $430,000 and re-introduce the $3,000 First Home Owners Grant for existing dwellings.
  5. Introduce a $10,000 concession on transfer duty for seniors over the age of 65 to encourage ‘right sizing’.

“REIWA welcomes the State Government’s commitment to keep property taxes on hold for WA residents and whilst some of the reforms we recommended were not addressed in the Budget, we appreciate the current fiscal position,” said Mr Collins.

The State Budget also revealed that growth in the State economy is expected to recover from 0.25 per cent in 2016-17, to three per cent in 2017-18. Employment growth is also forecast to recover, with nearly 20,000 jobs expected to be created in 2017-18, attributed to a modest increase in population growth expectations.

“The McGowan Government should be congratulated on their efforts in reducing the State’s debt. REIWA will continue to work with the Government to help home ownership become a reality for more West Aussies and also assist the Government in getting the Budget back to surplus,” said Mr Collins.

Comments (0)

03 October 2017
By portermathewsblog


Written by Natalie Hordov via Eastern Reporter REAL ESTATE

REIWA president Hayden Groves.

THE Perth property market is showing signs of stability with both the median house price and overall median rent holding steady in the three months to August 2017.

According to reiwa.com data, the median house price was $515,000, while the median rent was $350 per week for the fourth month in a row.

President Hayden Groves said it was encouraging to see the median price remain firm across both sectors of the Perth property market.

“The stable medians are good news and indicate that seller’s and landlord’s expectations are matching those of buyers and tenants,” he said.

Listings for sale have continued to trend downwards over the past month, decreasing by 1 per cent and are 10 per cent lower than three months ago.

“The reduction of properties for sale should create a better balance between the supply and demand of Perth’s overall housing stock,” Mr Groves said.

“Traditionally in spring, there tends to be a lift in sales activity which means there is potential for the median house price to increase in the coming months as we see more demand for housing and increased competition from buyers.”

In the residential rental market, reiwa.com data showed stock reduced by 6 per cent to 10,046 properties for rent, with leasing activity up by 8 per cent during the month of August.

“The boost in leasing activity is pleasing to see and has contributed to the declining trend in listings levels as rental stock gets absorbed due to the demand from tenants,” Mr Groves said.

“This improved activity is also helping to keep the overall median rent in check at $350 per week, stable for the fourth consecutive month, which is welcome news for landlords and property managers alike.

“With the warmer weather ahead, we should typically see both buyer and tenant activity levels increase.

“Together with the stabilising trends in median house and rent prices, the Perth property market is showing positive signs as we head into spring and summer.”

Comments (0)

12 September 2017
By portermathewsblog


via therealestateconversation.com.au

With spring expected to draw an influx of buyers, and amid tight supply of properties for sale, Perth property prices could rise in the coming months, says Hayden Groves, president of the REIWA.

The Perth property market is showing positive signs as we head into spring and summer,” says Hayden Groves, president of the REIWA.

New data from the REIWA shows Perth’s median house price and median rent held steady in the three months to August 2017.

The median house price remained consistent at $515,000, and the overall median rent was stable at $350 – the fourth consecutive month rents have held steady.

REIWA President Hayden Groves said the results are “encouraging”.

“The stable medians are good news and indicate that sellers’ and landlords’ expectations are matching those of buyers and tenants,” said Groves.

Property listings down 10 per cent for the quarter

The reiwa.com.au data shows listings for sale eased one per cent lower in August, and are down 10 per cent compared with three months ago.

Groves said prices could rise in spring, when it’s likely demand will pick up.

“Traditionally in spring, there tends to be a lift in sales activity,” he said.

“There is potential for the median house price to increase in the coming months as we see more demand for housing and increased competition from buyers,” said Groves.

In the rental market, stock is down 10 per cent, and leasing activity is up 8 per cent

In the residential rental market, reiwa.com data shows stock levels declined by six per cent to 10,046 properties in August, and leasing activity rose by eight per cent.

“The boost in leasing activity is pleasing to see and has contributed to the declining trend in listings levels,” said Groves.

“Rental stock gets absorbed due to the demand from tenants,” he said.

Comments (0)

05 September 2017
By portermathewsblog


Nicole Cox via realestate.com.au

Perth’s property prices have dipped more than 10 per cent in the past three years, but a new report suggests evidence of some relief with the rate of decline abating.

The latest CoreLogic Hedonic Home Value Index shows house values in Perth have fallen by 2.6% so far this year, making it the worst performing capital in Australia.

In August, Perth property prices dropped 0.8%, compared to the 1.3% decline in July.

House prices suffered a 0.9% drop, while unit prices fell by 0.6%, bringing the median property price in Perth to $462,927.

perth skylineIn August, Perth property prices dropped 0.8%, compared to the 1.3% decline in July. Picture: Getty Images

August property data showed Perth and Darwin continued to endure declining dwelling values, which had trended lower over the past month and rolling quarter.

“However, the annual trend highlights the rate of decline has been easing,” the report says.

“Since peaking in 2014, Perth dwelling values have declined by a total of 10.8%, while the cumulative decline across Darwin has been more severe with values down 18.6% from the market peak.”

CoreLogic head of research Tim Lawless says despite lagging property values in Perth, it was still one of the most affordable markets in the country.

“The silver lining around the decline in values is a substantial improvement in affordability,” Lawless says.

On Tuesday, WA Housing Minister Peter Tinley told a Committee for Economic Development Australia that lower-income earners were still being priced out of the Perth property market, despite softening values.

Tinley said Perth’s shortage of affordable housing, coupled with stagnant wage growth and the high cost of living had contributed to low-income earners being unable to realise the great Australian dream of home ownership.

CoreLogic says national dwelling values remained flat during August, with capital city values edging 0.1% higher. Simultaneously, regional dwelling values slipped 0.2% lower.

The report says the slowdown in growth has been most visible in Sydney, while the Melbourne market has been more resilient with auction rates consistently above 70%.

Comments (0)

22 August 2017
By portermathewsblog


Author: REIWA President Hayden Groves
Modiefied via reiwa.com.au

Over the last couple of years as the Perth property market has slowed, there has been a lot of talk about ‘waiting for the bottom of the market’ to arrive.

In an ideal world, it would be crystal clear when the bottom had arrived and primed buyers could act immediately to secure their dream home, content in the knowledge they had purchased their property at the absolute lowest possible price.

How do you tell when the bottom of the market has hit?

The truth is, it’s virtually impossible to tell whether the actual ‘bottom’ has hit until it has passed and we’re on the upswing again. The best we can do is observe trends in the market and make an educated guess. It’s not an exact science and can be influenced by a number of external factors, such as the economy, consumer sentiment and state and federal elections.

In Perth, signs over the last quarter suggest our local market is beginning to stabilise, with all key indicators (median house price, sales activity, listings for sale, average selling days and discounting) recording little or no change in the three months to June 2017.

Historically, one of the earliest signs of a change of momentum in the market is a period of stability. Although no one can accurately ascertain the future of the property market, the signs are there that we have finally found, or are very close to finding, the bottom.

Take advantage of affordable conditions

If you’ve been thinking of buying a home or purchasing an investment property, but have been holding off for the ‘right’ moment to strike, I’d advise you to take action sooner rather than later. Although we might not be able to predict with absolute certainty the ‘bottom’ of the market, we do know that property markets are cyclical and conditions will change again.

With the signs there that we’re heading into a period of stabilisation, now is the time to buy. There is lots of choice in the market with listings for sale , so you are in the best possible position to find a home that meets all your requirements at a competitive price.

I would advise buyers who are considering purchasing property in this market to take advantage of the steady, but quieter conditions. Do your due diligence and view a range of different properties in suburbs that appeal to you to ensure you explore all your options.

If you’re unsure what the best move is, speak to us on 9475 9622 or email us at mail@pmmetro.com.au  about your plans. They are well educated on your local market and will be able to advise what is most suitable for your situation. 

Comments (0)

15 August 2017
By portermathewsblog


Rachel Preston-Bidwell via reiwa.com.au

Perth home buyers looking to trade up are now seeing more opportunity in areas such as Peppermint Grove, Applecross and North Coogee, which topped reiwa.com’s list of affluent suburbs which have become more affordable.

REIWA President Hayden Groves said while prices in these suburbs were still well above the Perth median house price, they had become more affordable for buyers looking to trade up into those million dollar suburbs.

Peppermint Grove saw the biggest annual average change in its median house price over the past five years, shifting from $3,750,000 (year to April 2012) to $3,350,000 (year to April 2017).

“Buyers are looking for opportunities in areas with a good lifestyle scene, cafes and restaurants. In particular, we are seeing buyers placing more importance on proximity to good public schools.

“Suburbs such as Applecross, Nedlands and Peppermint Grove are within the catchment for some of Perth’s best public schools. Due to the easing off in median house prices of these suburbs, the opportunity is there to secure your ideal family home if you have the means,” said Mr Groves.

There’s also good news for sellers in Applecross, City Beach, Nedlands and Peppermint Grove, as properties are selling quicker in comparison to five years ago.

“In 2012, it took on average 120 days to sell a property in Peppermint Grove for instance. In more recent figures, the average selling days for the suburb sits at 90 days.

“We are also seeing sellers willing to negotiate and discount their initial asking price to achieve a sale,” said Mr Groves.

The average discount sellers in the five suburbs are applying to their asking price is around the eight to ten per cent mark in the year to April 2017 data.

“Both buyers and sellers are benefitting from the current market conditions in these million dollar suburbs,” said Mr Groves.

           SUBURB MEDIAN HOUSE PRICE (YEAR TO APRIL 2012) MEDIAN HOUSE PRICE (YEAR TO APRIL 2017) AVERAGE SELLING DAYS (YEAR TO APRIL 2012)  AVERAGE SELLING DAYS (YEAR TO APRIL 2017)
1. Peppermint Grove $3,750,000 $3,350,000 120 90
2. Applecross $1,380,000 $1,265,000 96 72
3. North Coogee $1,250,000 $1,155,000 66 97
4. City Beach $1,715,000 $1,637,500 80 60
5. Nedlands $1,507,500 $1,462,500 65 41

Figures based on median house prices in the year to April 2012 versus year to April 2017. Filtered for suburbs with greater than 15 sales, with a median house price of more than $1 million.

Comments (0)

02 August 2017
By portermathewsblog


Nicole Cox via realestate.com.au

Perth’s house prices took another dip in July, but the outlook is brighter for owners of units and apartments with an improvement in values, new data from CoreLogic shows.

Perth retained the unenviable title as the weakest performing property market in Australia, with a combined drop in dwelling values of 1.3% for July.

The CoreLogic Hedonic Home Value Index reveals that unit prices surged 1.8% in July and 4.2% in the past three months to a median price of $400,000, but house prices dropped 1.6% last month to return a 2.5% decline since the same time last year.

The median house price in Perth is now $498,200.

CoreLogic says there has been a slowdown in growth conditions in the hottest markets of Sydney and Melbourne.

Realestate.com.au. https://www.realestate.com.au/property-apartment-wa-burswood-124846370

At the other end of the growth spectrum, Perth and Darwin have continued to see dwelling values slip lower during July, taking the cumulative decline to 10.2% in Perth and 14.5% in Darwin since both markets peaked in 2014.

“The ease in the rate of decline has been most visible in Perth, providing a signal that the Western Australian capital may be approaching the bottom of the downturn,” the CoreLogic report found.

“Listing numbers have been falling across Perth which is a positive sign of improving conditions and transaction numbers have found a new floor at around 2500 sales per month.”

https://www.realestate.com.au/property-apartment-wa-alkimos-124352842.

CoreLogic Head of Research Tim Lawless says while the market has slowed from recent highs, growth remains robust.

“I don’t think there is any one factor causing the market to lose steam, rather it is the culmination of several factors working together,” Lawless says.

“Higher mortgage rates and tighter credit policies have dented investor appetite. This is clear from the RBA’s monthly credit aggregates which show investment related housing credit growth has consistently slowed from late last year.”

He says higher mortgage rates are now also impacting on interest only loans as well as fixed rate loans, which is likely to further deter some prospective buyers.

Comments (0)