Perth July 2017

The month in review: Perth

By Herron Todd White
July 2017

The median sale price in Perth has reduced to $515,000, meaning that buyers continue to get better value out of their lazy half a million. Our success rate from our recommendations last year was somewhat lack lustre, but heavily influenced in a negative manner by state government tweaks to first home buyers grants directing traffic to new estates as opposed to established suburbs. Two of our recommendations out performed the rest of the market (Ferndale and Kingsley) whilst the remainder struggled to gain any traction (Greenwood, Armadale and Kelmscott). Given the $500,000 topic, all of last year’s recommendations fell within traditional mortgage belt areas, which overall have performed poorly over the previous 12 months due to a lack of consumer confidence, an increasing unemployment rate and an increase in mortgagee activity. That is not to say that the whole market performed in a similar manner – upgrade suburbs have been performing strongly over the past few months as cashed up buyers take advantage of perceived good value and low borrowing costs.

So the challenge is where to put our lazy half a million dollars this year. Our number one pick is Nollamara, which has a median house price of $425,000 and is situated only 10 kilometres north of the CBD. The suburb offers modern 3-bedroom, 2-bathroom group dwellings for well under $400,000 and traditional homes for well under $500,000. The suburb offers good access the CBD and is situated proximal to the employment centres of Malaga and Osborne Park.

Also in the North, Craigie is presenting as extremely good value at present. The suburb is situated one suburb in from the coast and 22 kilometres from the CBD. The median sale price at present is $450,000 – some $90,000 cheaper than the next suburb to the south and has a lower median sale price than the next two suburbs to its immediate north – it simply doesn’t compute! For the median price, you can still purchase an older style 4-bedroom dwelling on a 700 square metre allotment and be ten minutes from the beach.

Next on our list is the suburb of St James, situated some seven kilometres south of the CBD. Whilst the median sale price is currently $535,000, the market is starting to realise how attractive the location of the area is despite some socio economic issues and gentrification is well underway. Older style homes on 500 square metre lots remain available for sub $500,000, and many villa style dwellings can be purchased for around the $400,000 mark. Given the suburb’s proximity to the CBD and Curtin University, it appears to be good value at present. Further, many buyers are beginning to see St James as a more affordable option in comparison to East Victoria Park and are buying with the intention or rebuilding luxury residences. As this trend continues, the appeal of the suburb will only increase.

Lastly, we see the suburb of Medina as providing a very good option for first home buyers and investors alike. Given the median sale price currently sits at $250,000, you can buy two properties for your lazy half a million. What will you get? Older style free standing dwellings on 700 square metre lots that attract a rental return of $200 to $230 per week.

The current market is a perfect time to be considering what to spend half a million dollars on. There appears to be some very good value propositions throughout the entire Perth metro area and there are early signs of market stabilisation. The remainder of 2017 could prove to be very appetising, particularly across the established residential housing market.

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