The month in review: Perth
By Herron Todd White
July 2010
With $500,000 to spend this month, we are limited to just
50% of the market as the median house price in Perth
currently sits right on that mark. With that said, there are
still some great buys in good locations.
At the top of our list is the northern beachside suburb
of Scarborough. Located adjacent to one of Perth’s most
popular beaches, the suburb benefits from good access
to the CBD, is well located to employment hubs and hosts
a variety of restaurants and cafes.
Scarborough has been a solid capital growth performer
over the last decade, averaging 12.2% per annum. It also
has the added benefit of reasonable rental returns with
consistent demand. Scarborough has long been the
destination of young couples either moving out of home
or moving to Perth from the country and from interstate.
It will continue to be a drawcard, even through the
proposed redevelopment of the foreshore, although we
stress that this could take a while to come to fruition.
For our $500,000, we would purchase a three bedroom
villa, well located to shopping facilities and the beach and
we would anticipate renting the unit for around $350 per
week.
In the southern suburbs, Coolbellup offers significant
potential. This 1950’s suburb is undergoing gentrification
and in the meantime, you can still purchase an original
dwelling on a 700sqm-plus lot for under $400,000.
The median sale price in Coolbellup is just $380,000,
which is a minimum of $70,000 under surrounding
suburbs. The suburb is well located, with good access
to the freeway, and only 10 minutes from Fremantle. We
consider Coolbellup offers strong capital growth potential
in the medium term.
Closer to the city, units through South Perth and Como
are still attractive and can be found in the sub $500,000
category. Not only do these appeal to CBD workers,
but the nearby Curtin University offers a new wave of
prospective tenants each year.
The recent debate over the proposed Resources Super Tax
has had a cooling effect on a firming residential market.
Discussions with selling agents have revealed declining
home open numbers and falling sales statistics.
A reduction in activity in the existing dwelling market
may be countered by a reduction in vacant land approvals
which have been in consistent decline since 2005.
According to the Department of Planning, the number
of lots within developers’ applications has dropped 37%
this quarter, with final approvals down 10%. The overall
effect of this may be that values will remain static in the
short term with good growth prospects once consumer
confidence returns, with a lot riding on announcements
relevant to the livelihood of the resource industry.
|
