As the national property downturn eases, Perth is continuing its gradual return to form, showing increased stability
Perth is still a long way from reclaiming the glory it had during the mining boom, but it is gradually climbing back up to a strong position.
“Whilst far from being back in the boomtimes, Perth and WA seem poised for more stability and moderate growth going forward,” says Rocket Property Group CEO Ian Hosking-Richards.
“Population growth would need to pick up in order to see any significant price rises, which in turn depends on jobs growth, which is currently lacklustre but should pick up over time.”
Perth’s recovery is tenuous at this point, and lending restrictions are playing their part in slowing the market’s momentum.
However, Hosking-Richards is confident about this city’s future.
“It may be a slow return to form, but long-term prospects are good.”
Indeed, Perth’s rate of decline stayed at 0.4% over the two months to April 2019, a good indication that the market is finding its footing.
“March and April 2019 have recorded the lowest level of declines since June 2018, which is an encouraging sign in a challenging market,” says Damian Collins, president of the Real Estate Institute of WA.
“We don’t expect to see any notable price increases in the immediate future; however, price values look like they are starting to stabilise.”
That said, Collins warns that investors should also pay attention to the country’s political situation and should not get too excited too soon.
“While these latest figures indicate we might be seeing the signs of a recovery on the horizon, our local market is still fragile,” he points out.
“We need our state and federal governments to do everything they can to support the recovery of the WA property market – not hinder it.”
Rents begin increasing
Real Estate Institute of WA data show that the number of properties for sale fell by 3% from March to April 2019, but the number of rental listings increased by 7%.
“This has come at a time when listings for sale have started to decline, despite sales remaining low, which could indicate that vendors are choosing to remove their property from the market and try their hand at renting it out instead,” Collins says.
Indeed, alongside property prices, weekly rental rates in WA have been increasing, with Stirling, Mindarie and Rivervale leading the pack.
SUBURB TO WATCH
NEDLANDS: Amenities prop up premium suburb
One of Perth’s premium suburbs, Nedlands has been on a rocky road over the past few years, but business appears to be picking up.
Despite a 0.7% drop in house prices in the year to April 2019, the median value remains above $1.5m. Unit prices also saw a resurgence of 10.8% to a median of $638,852. However, the rental market tells a different story, with weekly rents of houses and units falling by 10.8% and 4.4%, respectively, in the 12 months to January 2019, suggesting this is more a buyers’ than renters’ market.
Nedlands remains in some demand because of important advantages like proximity to the University of Western Australia and Sir Charles Gairdner Hospital.
Amenities: Nedlands residents are close to amenities like schools and hospitals
Price: Nedlands is one of the more expensive suburbs in Perth, but its growth is sustained