Western Australia is home to one of the country’s lowest-performing economies and as a knock-on, the Perth housing market has begun to suffer.
Some of its suburbs, however, are attracting increasing levels of investor attention. Could this be the upturn needed to change the face of the property market?
Between 2007-2013, the mining boom in Perth caused a sudden surge in property demand. As expected, this reduced the supply and boosted property prices across the city, with the median eventually reaching a staggering $550,000.
As mining projects started to shift from execution to production phases, however, these quick wins started to reduce. Economic slowdown took its toll and Perth earned its name as one of Australia’s most struggling cities.
Perth’s buyer market, however, has been seemingly unaffected by this downturn, as a real bounty of options and reduced competition have left buyers with a broad range of choices for personal purchases or investments.
Freemantle and Alfred Cove – two of the city’s blue chip suburbs – have been of particular interest to investors looking to swipe a deal and as a result, prices have actually increased recently.
A 3-bedroom home in both of these suburbs usually comes in at around $700,000, but prices have started to push close to $1 million for 4-bedroom properties.
Keeping tabs on market opportunities
Industry experts are urging buyers to aim for mid-range properties between $500,000-800,000, as demand is expected to filter down from blue chip suburbs to these. Investor interest has already increased since the start of 2017, so returns from mid-range homes are anticipated to bring in steady returns.
Coupled with new first-home buyers grants, the affordability of the Perth market also makes it an excellent place for those looking to get their feet on the property ladder to start out.
How are the numbers looking?
When compared to Australia’s more prominent markets such as Melbourne and Sydney, Perth is definitely flaunting affordability. Although this is great news for buyers, investors should be wary of the steady decreases in value.
Year-to-January in 2016, property prices in Perth and its surrounding suburbs dropped by 4.3%, which easily left it as Australia’s worst-performing city. Median house prices are down to $520,000, with units coming in at $430,000.
These price falls definitely haven’t been helped by lower-than-usual stock volumes, which usually serve to motivate buyers and boost overall competition. In fact, numbers from REIWA show that sales figures have dropped from over 9,000 to near-on 6,000.