All signs point to property recovery in Perth
AT Acton, we are cautiously optimistic about the property market in 2018.
The final quarter for 2017 saw a shift in buyer sentiment and stock levels are down significantly in soughtafter suburbs.
Our agents and property managers are reporting an increase in the number of people attending home opens and vacancy rates have finally started to come down.
There seems to be a general positive sentiment about the market, which is a good indication of the direction we’re headed.
If you have been waiting for prices to drop further, I suggest you wait no longer.
In the western suburbs, stock levels are down by as much as 70 per cent in some suburbs.
There is a shortage in Nedlands, Cottesloe, Floreat and Claremont, which means increased competition among buyers.
We are also experiencing record levels of “off-market” transactions, utilising a database of warehoused buyers eager to enter the market. ■
2018 is almost certainly the beginning of the recovery of the Perth property market.
I think the growth will only be moderate at around 4 per cent per year for the next few years.
In Perth, there have been very few new apartment projects starting construction in the past year and this will lead to a significant shortage of supply in 2018 and 2019.
When there is a supply shortage we usually see increases in price, however I expect these to be moderate gains due to the limited wage growth in WA.
We see the best growth areas being:
- East Perth, due to the footbridge connecting to the new stadium and Burswood being completed.
- Karrinyup, where there is a shortage of supply of high-end yet affordable apartments and the Karrinyup Shopping Centre is going through a $600 million redevelopment.
- Claremont, where there is limited supply and a huge demand from downsizers wanting large apartments.
- Rockingham foreshore, where prices are very low and the area seems undervalued given the abundance of new cafes, restaurants and bars along the northfacing beachfront.
- Ascot Waters, where the marina is going through major redevelopments and there is almost no supply of high-end, waterfront apartments for people wanting to stay in the eastern suburbs. ■
PERTH property values have been in decline or flat for the past five years, but in the past two months prices have not declined, which signals the market is moderating.
There is heightened buyer inquiry and transactions in the first-home buyer and lifestyle markets indicating a positive outlook, albeit one to be cautiously confident about.
Buying activity is being driven by stabilising employment and population growth in WA, while investor activity remains subdued.
While the rental market remains challenged, vacancy rates are starting to slowly fall off a record high supply of stock. Rental values will remain contained into 2018 in comparison to previous record levels, and will be further limited by first-home buyers purchasing more affordable new homes.
Sale price movements are expected to be minimal and moderate in the medium term, but a healthier, more active market is expected during 2018.
Sales activity will continue to improve in the metro area and some regional markets such as Bunbury and the South-west region.
Markets to watch may include the Swan eastern corridor, the coastal Cottesloe-claremont precinct, the Ardross-melville area south of the river, and northern coastal suburbs such as Hillarys and Duncraig. Over the past quarter, most of these locations have had positive price growth. ■
Travis Coleman Acton chief executive
Paul Blackburne Blackburne managing director
John Percudani Realmark managing director