After a sequence of flat years due to the resource sector downturn, there are early signs Perth’s property market is turning a corner, according to leading real estate group, Raine & Horne.
“Economic reports in January and February will set the tone for a 2017 rebound,” said Craig Abbott, General Manager WA, Raine & Horne.
“The key factors we’ll be looking for in WA will be the performance of the retail sector over the Christmas period, the local unemployment rate and inflation. The February meeting of the Reserve Bank will also be monitored closely,” said Mr Abbott.
For now, however, real estate confidence has picked up with 10% more people attending open homes or searching for properties online in the final quarter of 2016 compared to the previous year, according to Mr Abbott.
“While this activity hasn’t translated into stronger capital values, off-the-plan and recently built apartments, priced between $300,000 and $500,000, are attracting the attention of motivated buyers and investors.
“In addition, a number of residential development sales are a positive sign interest is returning to the Perth market.”
Raine & Horne Commercial Western Australia recently sold a residential development site in southern Perth, and has a development site under contract at 32 Cedric Street, Stirling[i] with a private buyer. This 782 square metre site has development approval for 32 apartments and is selling for $1.475 million.
“Several purchasers lined up to secure the development sites, and while the final prices are a little subdued, it demonstrates the Perth residential market represents excellent value for developers and there is interest when the price is right,” said Mr Abbott.
“However, developers are cautious and are doing their sums. They will only consider assets that are in prime locations close to valued amenities such as retail, transport and entertainment outlets, and where there isn’t an oversupply of nearby apartments.”
In Perth’s south, Tim Chant, Principal of Raine & Horne Cannington said the local real estate market is showing promising signs of life.
“Everything is selling, whether it’s apartments, houses or blocks of land, as long as the properties are priced sensibly to sell,” said Mr Chant.
“The majority of the apartments for sale are near-new rather than off the plan. That said, there are still some new properties available such as the stunning one and two bedroom apartments at 1-20/233 Wharf St, Queens Park[ii], which hit the market recently for sale from $320,000.”
Mr Chant believes that 2017 will produce even stronger levels of real estate activity, regardless of whether the Reserve Bank pushes up interest rates as is widely predicted.
“Rates are so low that a hike in 2017 should make little difference to the market. To some extent, it will demonstrate the real estate market in Perth has reached the bottom and that it’s time for buyers to get off the fence and make a move,” said Mr Chant.
“Also if the RBA decides to tighten monetary policy, it will be a good sign that there is confidence in the Australian economy, which is always great news for real estate.”
In the city’s inner north, it’s possible to secure a 1-bedroom apartment from $340,000, and Larry Gallagher, Principal of Raine & Horne North Perth, said there are signs more buyers are back in the market.
“We have listed a 1-bedroom apartment 38/15 Aberdeen Street, Perth[iii], for $349,000, which offers a great lock up and leave, low maintenance, lifestyle,” said Mr Gallagher.
“In immaculate condition and with quality fixtures and fittings, this very affordable apartment features a functional galley kitchen, spacious entertaining and living areas, which is sure to appeal to the Millennium generation.
“Most of the buyers in the market are price savvy, and those vendors with properties in inner city Perth, who are prepared to meet the market, will sell in a relatively shorter period of time,” said Mr Gallagher.