According to recent figures from the Real Estate Institute of Western Australia (REIWA), the December 2015 quarter saw the median house price in Perth increase by around 1% to $540,000, the first time in three quarters a rise has been recorded.
Listings in the city also fell to 14,539 during the quarter, which REIWA president Hayden Groves said points to the Perth market showing signs of “stabilisation.”
Ben Lamers, director of LMW Buyers Agency, broadly agreed with that sentiment, but said there were some seasonal factors that are currently affecting the market as well.
“What we’re seeing at the moment is probably a bit of a seasonal thing, When you come to that November and December period a lot of people delay making a decision, so there were probably some houses that were taken off the market or were delayed in being put up for sale which is affecting some of the figures at the moment,” Lamers said.
“I think if you look broadly at the Perth market, prices have been declining over the past year or so, but I think we’ve got to the point where we’re bouncing along near the bottom and it will be interesting to see what happens in the first quarter of 2016,” he said.
“I’m not sure that we’re right at the bottom of the market, but I think we’re getting to the point where there is some stability in the market and I think 2016 will be the year the market starts to improve a little.”
That outlook seems to be one that is increasingly being shared by investors, with Lamers claiming interstate investors are setting their sights on the WA capital.
“The astute buyers from the Eastern seaboard are really starting to pay attention. We’re getting a lot of calls from buyers in Sydney and Melbourne at the moment. That probably says they think those markets are too high and Perth is too low,” he said
“For the median price in Perth you can get a really good property in a good location that’s going to be pretty close to cash flow neutral. People are starting to think that while other markets have peaked, over the next few years Perth will start to improve.”
Lamers isn’t the only one in the city to have noticed a popularity increase.
Liz Sterzel, buyer’s agent with Property Wizards, said more and more local and interstate investors are looking to buy at the bottom.
“We are seeing a number of enquiries from Eastern seaboard investors who feel that Sydney and Melbourne are still overheated, and that with Perth’s market being at a low, the time is now right to invest,” Sterzel said.
“Local West Australian investors with a more up-to-date picture of Perth also seem to be far more positive about the Perth property market, though it is early days yet,” she said.
Though the heady days of the mining boom may be over, Sterzel said there are other reasons investors should be confident about Perth’s prospects – as long as they do their research.
“With other industries such as tourism taking up the slack, and population growth still faster than most other states, investors are starting to see reasons to be confident in Perth,” she said.
“Investors who do their research can still find promising properties, with the most popular strategy being to find an add value property with potential to enhance the market’s natural performance.”
While rents in the city may not be where they were during the recent boom times, Sterzel did remind investors that they are “still fairly high compared with historical returns.”
There are some words of caution for investors looking to Perth though, with Lamers stressing that they aren’t going to see a similar performance compared to what happened during the mining boom.
“That [mining boom] was a once in lifetime sort of thing. We saw it in the ‘60s and again in the late ‘80’s and then from 2003 – 2008, but it’s not going to be like that now. It’s going to be a period of more sustained growth.”
