The month in review: South West WA
By Herron Todd White
June 2016
Throughout the South West of Western Australia there is a reduced level of sales with a weakening of values throughout the lower and middle segments.
The top end of the market continues to be problematic, with continuing weak demand and an over supply of properties for sale, coupled with a lack of prospective purchasers in that value range, resulting in downward pressure on values.
The rural residential market is also continuing to slow with the majority of sales being below $1 million. This market is also experiencing extended selling periods.
Vacant land values have now started to level after seeing a correction throughout the first half of 2016. Building activity has continued to weaken over the past six months, however the month of April saw an increase in the number of new homes sold, indicating a levelling out.
Rents have fallen significantly in the past 12 months, particularly in the outerlying residential estates.
Smaller lot developments in the new subdivisions have become popular due to their affordability and it is anticipated that this will be a trend going forward. This is showing in the move away from larger homes to the smaller, better appointed homes on small blocks, with limited gardens and the ability to lock and leave.
Overall it is likely the property market in the South West for the remainder of 2016 will be slow. The swings of the Perth market during the past several years have been missed in the regions but we would recommend caution as the slow down in the state resource sector, continued weakness in Perth and general economic uncertainty could promote more of a widespread downturn throughout the market. |
