Perth

The Smartline Report – July Edition

The month in review: Perth

By Herron Todd White
July 2015

Buyer confidence has well and truly left the Perth market.

The median house price in Perth remains the same at $550,000 for the third consecutive quarter.

Perth-1

Source: REIWA

The number of total current listings (including land, units and houses) is well above equilibrium at about 14,289 in comparison to 12 months ago when it was just slightly below at 10,538. This confirms that the market is slowing.

Perth-2

Source: REIWA

Agents are still reporting good levels of enquiries and to the week ending 14 June 2015, there were 693 sales in the Perth metropolitan real estate market compared with 751 for the same week a year ago.

The recent interest rate cuts have done little to boost the confidence in real estate. When people are still losing their jobs in the mining sector, it will take a little time before the dust settles and people can see clearly where things are heading.

So, if I was going to park a lazy half million somewhere, I would probably be patient and hold back for a little while as we suspect that the market is about to change in Perth. We do not see that confidence is likely to come back any time soon, so if you can bear having $500,000 sitting in a very low interest bearing account for a little while longer then now would be a good time to start doing some homework.

There are still areas in the Perth metropolitan area which are relatively close to the Perth CBD and more importantly, close to rail (Bassendean as an example, which is 11 kilometres east of the Perth CBD) which hold good value for money. Our recommendation is to look at areas such as this which are close to public transport links, amenities (shops, cafes), and have an ageing population with older housing stock, located on larger, traditional sized lots. These types of areas afford the astute buyer the opportunity for a good longer term play that may one day give you development upside in addition to the traditional capital appreciation.

Remain patient, because your half million might buy you a little bit more by the end of the year.

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

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