Positivity peeks into the Perth market, but a lack of stability stays experts’ optimism with regard to long-term growth
Following a prolonged period of downs, recent upticks in some suburbs are indicating a promising future for Perth.
“We’re starting to see some signs of positivity, but it’s very early days. The first sign was price growth in the Western Suburbs and those Northern Beaches suburbs,” comments Nerida Conisbee, chief economist at REA Group.
“Prestige suburbs are really starting to grow. Although Perth overall is going backwards, those suburbs saw 10–15% price growth over the past 10–12 months.”
Conisbee believes interest in Perth is starting up again at least in part because many people consider the market to have bottomed out.
“Economic growth is mildly starting up again, and there seems to be more sustained interest in Perth,” she adds.
However, buyers do need to temper their expectations and not expect significant cash flow.
“I think it’s close to bottoming out – it’s very difficult to tell. But don’t look to buy now and sell in 12 months. The bottom could come in the next 12 months, it could come in the next 18 months. You do need to take a bit of a long-term view and hold for two to three years if you’re looking to invest in that location,” Conisbee concludes.
For Multifocus Properties & Finance CEO Philippe Brach, investing in Perth at this point is still far too risky, given the lack of economic stability.
“There are probably good opportunities now in Perth, but it’s more a gamble than an educated investment decision,” he explains.
“Prices [could] start ticking up very drastically, and suddenly Western Australia is going to do great again. But when you make an investment decision, you go to an area where you’ve got many pillars of industry and a growing economy that is promising, rather than something that’s not 100% sure.”
Infrastructure projects have potential to improve economy
The city of Geraldton has been taking steps to add to its industrial power through the commencement of various infrastructure projects.
“Construction of the world’s largest satellite – inland from Geraldton – is scheduled to commence late next year, with anticipated direct and indirect employment opportunities to flow,” says Simon Pressley, managing director of Propertyology.
“Science, tourism and renewable energy are among the industries offering plenty of upside to have a positive influence on Geraldton’s property market in years to come.”
Coupled with the affordability of quality properties, this means Geraldton’s high vacancy rate could drop in the near future.
SUBURB TO WATCH
BOORAGOON: Family-friendly central location
This riverside suburb is in an ideal central location. Close to the coast and just 15km south of the Perth CBD, the area also falls into the catchment zone of a number of high-quality schools.
This, along with an abundance of local parks, makes the area an ideal location for long-term tenants, particularly those who have families. On average, houses are held for almost 12 years, while units follow closely at 9.3 years.
Investors can expect to spend around $910,000 on a median-priced house, while a unit will demand quite a bit less, at $530,000. Average weekly rents stand at $480 and $380 respectively.
Yield: Units in Booragoon have an indicative gross rental yield of 3.6%
Family friendly: There are lots of parks, schools and local amenities in the suburb
Can you afford to buy in this suburb? Find out how much you can borrow