South West WA September 2017

The month in review: South West WA

By Herron Todd White
September 2017

The major centres throughout the South West have seen sales volumes continue to remain relatively stable, however the residential market within rural residential localities and inland townships throughout the South West have continued to soften. The swings of the Perth market during the past several years have been missed in the regions as the South West is still benefiting from a strong population growth because people in general want to live here, employment permitted, as the region is characterised by pristine beaches, surf and its world renowned wine region.

Entry points into the lower end of the market range from $250,000 to $400,000 and for this amount you can purchase either a basic established residence or build a project home in one of the outlying new developments. These established homes are in general located in closer proximity to the beach than the new developments and as such the established homes generally offer better capital growth potential while the new housing market offers better yields. The lower market segment is generally being driven by first home buyers and also investors.

The stable condition of the lower market segment consequently has a flow on effect into the middle market as vendors of the lower market segment are looking in effect to trade up. It is generally the mums and dads that are active in this space as they are looking to upgrade the family home and currently this market segment is offering good value for money. This market segment is considered to be stable, however we note that it is not performing as well as the lower market segment.

This is understandable given the higher price range resulting into fewer prospective purchasers. While there seems to be a healthy balance between supply and demand the selling periods are in general longer than the lower market segment.

Unfortunately, the upper end of the market is considerably slower than the lower and middle market segments. Properties above $1 million are selling if they are priced correctly, however extended selling periods between six to 12 months are still common. This is a reflection of the limited amount of prospective purchasers in this price bracket.

That being said, the South West is considered to be a premium holiday destination and there is still demand from the wealthy to invest and holiday in the region. Therefore prestigious properties scattered throughout the South West, such as Naturaliste, Eagle Bay, Metricup and Yallingup are still regularly recording sale prices in excess of $1 million.

In conclusion, the South West market is generally stable as the weakening state economy is somewhat offset by a growing population that is characterised by a wide range of owners from home buyers, investors, families and retirees.