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  • Where is Perth's property market headed?


    Author: REIWA President Hayden Groves

    photo-australian-houses-suburbIn the current market, buyers have plenty of opportunities to find their ideal property. Supply remains at healthy levels so buyers can afford to take their time when making a buying decision with these conditions especially advantaging those upgrading their property.

    We’ve seen a shift over the past two years with sales volumes and consumer and business confidence lower than in previous years.

    We’ve also seen property prices moderate as the resources industry moved from a construction phase to a production phase, reducing workplace participation. data shows that the median house price for the Perth Metro Region for the year to February 2016 is $540,000 and sales volumes are at 22,547.

    Changes to the First Home Owners Grant has had some impact on where first home buyers enter the market. With the Grant now only available for new house and land buyers, first home buyers are more reluctant to choose an established property for their first home.

    While buyers have plenty of choice in the current market, those hesitant to purchase thinking the market will fall need to be cautious. There are some early signs, such as improved sales volumes since January that the market is at, or close to, the bottom of the cycle. If the market turns, then buyers are suddenly faced with, once again, having to make compromises in choosing their perfect property as prices rise through competition.

    When you’ve found a property of interest and are ready to put in an offer, refrain from using negative language when explaining to the agent why your offer is a certain amount below the asking price, focus on your personal affordability instead. Plus, there’s no need to run through what ‘needs’ to be done to the property as that’s of little concern to the seller; they don’t’ care what you do after you’ve bought it!

    For those of you selling, my advice is to meet the market in the early stages of coming to market. You need to ensure you’re competitive from the start so you must list at a competitive price early. Listing a higher price to ‘test’ the market will mostly likely mean you’ll have to discount later on. For the year to February 2016, data showed that 57 per cent of vendors discounted in order to sell and the average market discount was 6.3 per cent.

    Sellers must also make sure their property presents well. Often there’s no need to change anything structurally but a new coat of paint and a tidy of the garden can go a long way in helping your property stand out from the competition.

    Looking ahead, I expect market activity to remain somewhat subdued for the rest of year; a certain calmness in the market welcomed by many. We may see the median house price increase due to more sales in the higher price brackets from trade up activity. Supply is likely to remain at healthy levels particularly with many new, high quality apartments nearing completion.

    Originally published in The Sunday Times.