The month in review: Perth
By Herron Todd White
May 2010
A question that is constantly asked of Property Valuers’ is ‘where should I invest?’. It’s a great question, and if our
crystal ball gave crystal clear answers, we’d all be super
wealthy and possibly retired.
If we look at the price sector extremes of the Perth
property market, we find that they are in very different
stages of the property market cycle.
At the more affordable end of the scale, the south eastern
suburb of Byford is dominated by various land estates
which targeted first home buyers during the peak of
2006–2007 with further activity during the GFC with the
First Home Buyers Boost and state stamp duty waivers.
The typical property in these estates is a 160 to 200sqm,
project style four bedroom, two bathroom brick and tile
dwelling, situated on a lot ranging from 400 to 650sqm.
Entry level for a basic property is in the order of $330,000
to $350,000 with prices ranging up to the low $500,000s.
Caution is advised, as the area remains oversupplied and
there remains a significant supply of new land available.
There is minimal proposed infrastructure for the area that
would significantly affect the current population hence
we would expect the growth prospects to be minimal in
the short term.
At the other end of the spectrum, the suburb of Peppermint
Grove features in the nation’s top 10 most expensive
suburbs, with a median house price of $4 million and
what is reported to be Australia’s most expensive house
is currently under construction. You might have heard
about the $58.5 million dollar sale that occurred last year – well that was just next-door in Mosman Park.
The average home-owner is generally a company
executive although there are still some traditional
generational land-owners through the suburb. The
properties are characterised by lots typically ranging from
1500 to 4000sqm with a mixture of opulent modern multi
storey properties and restored and extended federationera
dwellings. It’s interesting to note that according to
the Real Estate Institute of WA, 50% of owners have no
mortgage, compared with just 32% in the Perth metro
area as a whole.
The premium sector of the residential market is still in
recovery mode, however an increase in sales activity and
a general lift in optimism indicates that values should
continue to trend in a positive direction.
On a more general note, we have seen the median
house price return to 2006–2007 levels, however this is
attributed to an increased level of sales in the premium
sectors whilst first home-buyers have left the market.
Many suburbs are still recovering and some are yet to
work out where the bottom is. Strangely, there are some
suburbs that are out performing boom time levels and
others where there is a wild fluctuation in asking prices – some realistic, some well and truly above market.
Our word of caution that each market segment is
performing differently at the moment, and the generic
statements published in the media doesn’t apply to the
market as a whole. Seek the opinion of a professional
property valuer who can assist you to make a prudent
decision.
|
