Property prices have held steady for three consecutive months, but oversupply continues to be a concern
The Perth market seems to be entering a stable period. According to Hayden Groves, president of the Real Estate Institute of Western Australia, market conditions levelled out in the September 2017 quarter.
“Conditions across both the sales and rental market were fairly stable. Both the median house and rent price held up ... while stock levels in both sectors had reduced over the month,” he says.
According to REIWA data, the number of properties listed for sale inched downwards slightly in September. The rental market has felt this pick-up as well, with the number of dwellings for lease falling by 3%.
“It’s very encouraging to see stock levels across the market continue to reduce, especially when we compare levels for both sectors on an annual basis. If this trend continues, we should see a better balance between supply and demand of stock start to emerge,” Groves says. Joonadalup South, Kwinana, Belmont and the western suburbs were regarded as top selling submarkets in the state, while Kalamunda, Bassendean and Bayswater were among the most popular submarkets in terms of leasing activity.
Perth still in slump phase
Though rental rates remain quite low, investors with a long-term investing strategy may be considering buying in this area while properties are still extremely affordable and tenant populations look to be increasing.
According to Shane Kempton, COO of Professionals Real Estate, heightened levels of investment in the resources sector are attracting more tenants, causing the stock of dwellings available for lease to fall.
If this trend continues and the rental vacancy rate drops to below 3.5%, landlords could find themselves able to raise rents again. This is then likely to bring in more property investors.
Kempton highlights the southeastern corridor of Perth as having potential for growth, given the existing infrastructure, including public transport, shops and schools.
Prices in suburbs like Kenwick are also very reasonable, considering its location near the Perth CBD.
Even then, some experts are hesitating as to whether Perth is really recovering at last.
“While the price fall is declining, our research suggests it is still in its slump phase, with a significant oversupply of properties for sale,” says Michael Yardney, CEO of Metropole Property Strategists.
“This suggests there will be further moderate falls in Perth property values over 2018.”
SUBURB TO WATCH
INNALOO: Prices drop in Perth suburb
A well-stocked suburb that contains two major shopping centres and Perth’s biggest cinema complex, Innaloo may be a shopper’s dream but it’s not a buyer’s paradise.
The suburb has been experiencing a gradual, sustained decline for the past three years – house prices decreased by 8.9%, whereas units reported a 13.9% dip. This could be attributed to Perth’s overall decline in the national property market. Nonetheless, investors who want to try their luck can reap an average of 4.9% rental gain for units and 4% for houses.
Innaloo remains a well-served suburb, with several dining options supporting the entertainment and shopping hubs.
Amenities: Innaloo has two large Westfield shopping centres and an Event Cinemas Megaplex
Transport: The 421 and 423 bus routes stop at Odin Road in Innaloo
