Experts say while first-home buyers dominated the WA market in the past 18 months, investors and trade-up buyers are now emerging as the new front runners in property sales.
According to REIWA President David Airey, the number of first home buyers has dropped 12 % since the June quarter with a notable fall in property sales priced under $400,000.
“I think the fall in turnover with sales under $400,000 has largely been a reaction to both low levels of housing stock and also affordability pressure on some first home buyers,” he says.
Development interest is also growing in WA, but with a slight twist. The latest report Herron Todd White report indicates smaller development lots are becoming the trend for developers, at least in South West WA.
“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,” the report states.
“A move away from the larger homes to the smaller, more well-appointed homes on small blocks, with limited gardens and the ability to ‘lock and leave’, ideal for the fly-in-fly-out worker.”
Back in Perth, a recent report released by the Australian Bureau of Statistics shows an 8.7% rise in housing prices in 2013, with sales high to finish off the year.
While this is positive for growth, potential investors may need to take a long-term approach or look outside the CBD.
The introduction of 700 additional rentals introduced to the market has seen metropolitan vacancy rates rise by a whopping 135% since the end of 2012.
This has equated to a drop of $10 per week in rental yields, making Perth’s median rent now $460 per week.
Two areas outside Perth still reporting good rental returns however, are the Mandurah-Murray area where rents have lifted by $10 to a median of $380 per week, and Port Hedland which, despite annual turnover being down by 60 per cent, is reporting rents of about $1,300 per week.
Closer to the city, some of Perth’s fastest growing suburbs are Brentwood with median house prices up 29% to $740,000 and East Cannington up 24% to $525,000.
