The local market is looking to right the ship as it navigates the recovery stage and affordable new land offers buying opportunities
Perth is definitely on the mend, but the road is going to be a bumpy one. “It seems to be in recovery at the moment, but it’s not a straightforward recovery. It’s not going to be a fast one,” says Nerida Conisbee, chief economist at REA Group.
“Premium suburbs are doing very well because a lot of them are seeing good price growth, and Perth is a safer market to invest in because the property [options] are more diverse.”
This slow recovery is reflected in Perth’s property prices, which are still at their lowest since June 2009, as per CoreLogic research analyst Cameron Kusher. In regional WA, values also continued to drop, falling by 6.5% in the 12 months to October 2018, according to CoreLogic’s Hedonic Home Value Index, and many investors are looking at losses. Buying in Perth may come down to good timing and patience over the next year or so as the state rides the correction period out.
“From a purchasing perspective, we’ve always had success in Perth and WA, but it’s been hard in the correction phase for a couple of years now, and I think it’s got a little bit to go,” says Damien Lee, head of acquisitions at Caifu Property.
Affordable land on the market
The price declines are a gold mine of opportunity for house and land buyers, as Perth is now offering some of the cheapest blocks of land in the country.
“The new land market in Perth has seen significant price reductions in recent years. Given current market conditions, there are some very affordable house and land packages available to buyers,” says Allison Hailes, CEO of the Urban Development Institute of Australia in WA.
“However, with the promising signs that are emerging in the broader WA economy, we don’t expect these market conditions to last much longer. While the current downturn has lasted longer than many of us expected, we are seeing light at the end of the tunnel.”
This optimistic outlook suggests that, with values that are lower than in Sydney, Melbourne and Brisbane, Perth could draw those who have been priced out of its peers. While the WA economy is still stumbling along, there are hints of growth.
SUBURB TO WATCH
GIRRAWHEEN: Low prices don’t save Perth suburb
Girrawheen’s rental market generates high yields of 5–5.5% at highly affordable prices, but the suburb’s values continue to decline.
The suburb’s name means “place of flowers” or “the place where flowers grow”. Girrawheen lives up to its name with the many parks in the area, along with sporting facilities, ovals and courts. The Newpark and Summerfield Shopping Centres serve residents in the suburb. The shopping districts of Kingsway City, Warwick Grove and The Square Mirrabooka are only minutes away.
House values are hovering around $300,000 after a drop of 9.4% over the year to October 2018, while the median unit price is just over $250,000 following a decrease of 7.6%.
Price: The suburb’s rental market offers strong yields at highly affordable prices
Amenities: Girrawheen is a haven for shoppers, with two shopping centres in the suburb and others nearby
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