Will Perth Bounce Back From Poor Past Report Card?
The Perth housing market continues to be the softest in the country and over the last month, it fell a further -0.5 %. Over the last year, prices are off by -8.9%, which is on par with Sydney.
Since the peak of the mining boom in 2015, Perth property prices have fallen away sharply with values now off -20.2% making the downturn worse than what both Sydney and Melbourne are currently experiencing.
The positive for Perth however, is that the vacancy rate is showing signs of turning around and rents are starting to increase again, which is an early sign that both employment and economic growth are coming back into the State. In fact, the vacancy rate is back to its lowest level in five years.
It has been a difficult period for many Perth vendors over the past year, with some sellers taking a loss.
“For many homeowners or investors who have sold their properties in the last 12 months for less than what they paid for them a few years back, it is discouraging,” said aussieproperty.com director, Paul White.
Despite this lackluster report card, there are a number of positive factors that suggest the tide is about to turn on the Perth property market.
“Recent surveys have shown that WA’s residential property industry sentiment has lifted, and although moderate, is none the less a step in the right direction.
“It is hoped that this trend will continue and lift further in the next 12 -24 months, particularly given that rental vacancy rates have reduced which is nearly always correlated to an improvement in the market.” said Mr. White.
Gauging by the numbers, Ripehouse Advisory CEO, Jacob Field is fairly optimistic about the W.A. capital.
“We are seeing sales volumes recover and yields keeping track. The stars seem to be aligning in Perth, allowing us to call the bottom and remain hopeful for an imminent recovery.”
In light of this, now could be a great time to take advantage of affordable property prices.
“The positive side of a soft market is the availability of stock that can be purchased at well below value.
“Now is a great time to enter the Perth property market, as long as buyers aren’t looking to buy and sell in a short period of time then the numbers will stack up.
“Every market has its ups and downs and if you can weather the storm and hold the property for 7-10 years you’ll be sitting pretty and in a strong position financially,” said Mr. White.
According to Mr. Field, “looking for the best deals or snapping up value add opportunities, is the best way to de-risk your investment in a recently dormant market.”
July snapshot - Perth in numbers