Having slowed to a halt in 2007, the Perth
property market is positioned for the next phase of stabilisation in 2008 – and it’s likely to last through to 2009.
Property values in Perth dipped 1.8% in the December quarter, according to Residex, with capital growth for 2007 levelling out at just 2.15%. This mild correction is likely to continue in Perth’s outlying areas with less impact felt in and around the Perth CBD thanks to solid demand.
“Perth property prices are underpinned by a strong state economy and an unbelievably tight commercial market, which is saving the residential market from a bruising correction,” says Braxton Chase CEO Andrew Donnelly.
“Given the period of sustained growth between 2003 and 2006, strong consideration needs to be given to the true market value of Perth property. With rental yields in Perth the lowest in the nation, the market requires a sustained period of stabilisation while yields and values catch up to the big prices paid during the boom.”
Donnelly says that waterfront areas can be expected to outperform the general market, as history has shown “that water is always the greatest underwriter of growth” – but overall, Donnelly believes that Perth is one of the least attractive property markets to invest in.
“For investors with a short to medium term mindset, 2008 is a good time to bypass WA altogether, which – barring a few exceptions – is not likely to see growth above inflation for at least two years.”
However, Real Estate Institute of WA (REIWA) President Rob Druitt is less cautionary, and, while describing the Perth property market as “resilient”, says that supply and demand drivers will help the market recover this year.
“Clearly the Perth market is very resilient – and why wouldn't it be, with WA continuing to lead the country in terms of business investment, exports, employment and population growth?" Druitt says.
"The slowdown in new housing activity in 2007 and continuing strong population growth will maintain the demand for housing, whether for sale or rent during 2008.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
tweed heads south
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out