The month in review: South Western WA
By Herron Todd White
September, 2009
History never repeats or so Split Enz would have you
believe. As a Kiwi it is always good to quote a New Zealand
band but in this case I ’m not sure the market has been
listening to the musicians. When I arrived in this fair part
of the world in early 2006 the market was moving in an
unprecedented fashion. The price of land was escalating,
along with the price of building and consequently
established properties were also rocketing up in value.
Properties values in less desirable areas were escalating
almost as fast as those on the beachside and valuers were
being called back to revalue properties after only three
to six months to enable clients to borrow more money to
pay for the four-wheel-drive or plasma TV.
All this is well-documented along with the crash that
followed. Where it all becomes historically interesting is
looking back at valuations and sales that were completed
in late 2005 and early 2006 only to find that the values
now being attributed to these properties are remarkably
similar. Metaphorically we went up the hill and down
again just like the grand old Duke of York.
Currently the market appears to be percolating along
quite nicely with reports from many agents of increased
sales volumes right across the value ranges. This is the
first time in quite some time that movement is being
seen in the more expensive markets. Apartments have
also seen some sales both in the less expensive and the
upper valued products. To say there is a boom would be
to overstate it severely but the level of confidence in the
market has certainly been higher than it has been for the
last two years. We seem to have got past the first home
buyer only market (which we had for the previous six
months) to now being a more “normal” pattern including
some investors returning, although not in full force.
We have seen this trend right across the region and not
just in Bunbury. I would add a cautionary note in that
buyers are still looking for bargains and while there has
been some price movement it is only at a limited level.When we look at the total number of sales for Bunbury and
the southwest for the first quarter of the last three years,
there was an obvious dip in 2008 but then rebounded
quite strongly in 2009, although more so in Bunbury.
This is possibly due to larger numbers of first home buyer
properties available in this market compared to the wider southwest region, meaning the government incentives
have therefore had a greater effect within the city. The
increase in confidence and consequently the purchase of
high-value properties has been more slowly appreciated
in the higher value areas of Margaret River, Busselton and
Dunsborough. At this stage there seems no reason why
this trend will not continue with growth progressing at a
modest level into the future provided we have no more
job losses or external shocks from the world economy.
In summary, while to predict a boom would be optimistic
in the extreme, the market appears to have returned to
a far more stable state and with a generally much more
positive outlook towards the future, even if it looks very
much like the past in terms of value levels.
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