Hot Topics – September 2016
Last week we held our inaugural Perth Property market update at the Victoria Park Hotel with over 50 valued Clients attending the evening.
This month I have summarised some of our findings and I would be happy to meet with you to present at your convenience should you be interested in receiving an update?
1. REIWA market update – total number of sales listings in Perth has been trending down since a peak of over 16,000 in November 2015. Last week we saw total listings drop below 14,000 for the first time in 18 months. Rental listings have continued to rise and the Perth vacancy rate stands at +6% which is putting downward pressure on rents. Clients are always asking me whether the market will fall further or when it will rise. The answer is when the number of listings drops to a point where there is less choice… probably sub 12,000 for Perth. It is too early to call whether the market has bottomed but you can find the REIWA figures weekly in the West Australian Saturday Real Estate section and monitor for yourself. Alternately contact me anytime for an update…
2. Perth’s infrastructure projects gather momentum adding to Perth’s liveability and attractiveness as a holiday destination – Elizabeth Quay opens, Airport Expansion delivers first class facilities, Perth City link and Perth’s new Busport open, Perth’s children’s hospital close to completion, constructions commences on Scarborough foreshore redevelopment, new stadium due for completion end of 2017, Crown’s new hotel opening December 2016, construction also commences on +$400million museum.
3. Perth’s population continues to grow, just not as quickly as it was – Latest ABS figures show Perth’s net population still growing and the government is planning for a city of 3,500,000 people inside 30 years. When you think of another 1,500,000 people moving to Perth you get an appreciation for how important it is that we continue to offer a range of housing solutions, specifically those solutions that can be developed within close proximity to existing infrastructure. You should also get an appreciation for how valuable well located property close to the city, shops, restaurants, amenities and public transport will become!
4. Apartment living is here to stay and is being embraced by young professionals and downsizers.
Did you know that in all our apartment projects completed over the past 3 years the lowest number of Owner Occupiers stands at 60% and the highest over 75%. In fact over the past 12 months, 8 out of 10 Buyers have been owner occupiers. This is great for all Owners in a complex as Owner Occupiers generally take a keener interest in the overall upkeep and fewer Investors means less competition when finding tenants. Just remember not all apartments are designed or built the same, quality plans and fittings in well located buildings is imperative.
5. Density isn’t all about apartments with strong demand for villa’s and townhouses.
The success of the Giorgi group’s Bloom Wembley terraces and our villa’s in Scarborough highlight the continued strong demand for this type of accommodation. We have just 2 villa’s left in Scarborough and stage 1 of Bloom is complete and sold out with stage 2 well under construction.
6. Interest Rates
Interest rates are currently at record lows with most of our Clients now on variable rates between 3.89% – 4.25% depending on level of borrowing, investment versus owner occupied, fixed versus variable. The drop in interest rates means cash flows on investment properties remain very attractive despite the drop in rents.
7. Housing Affordability
Perth is now the most affordable capital city in Australia with just over 20% of income spent on mortgage. The Australian average sits just under 30% and Sydney just under 40%!
There is no question that the Perth property market continues to remain soft and that there is presently more stock available than demand. Coupled with a lack of confidence in the overall market has presented, in my opinion, the best buying opportunities I have seen since my career first began in 1998 / 1999. The supply tap has already been switched off and these conditions will not last, they never have!
If you would like to arrange a time to meet with me to go through my presentation then please do not hesitate to contact me directly on 0411 144 230 or richard@celsiusproperty.com.au
Kind regards
Richard
