Experts say now is the time to buy property in Perth — but warn those who don’t invest soon risk missing out on the best possible deals.
The Perth property market has been sluggish as the mining boom comes to an end, fewer people move to the State and demand for housing drops accordingly. That has seen prices actually come down slightly in recent months as the number of houses is greater than the number of people looking to buy.
While that isn’t great news for those selling a property right now, it is a great opportunity for those in the market to snap up a bargain.
In the Australian Financial Review recently, respected WA real estate entrepreneur Gavin Hegney, of the Hegney Property Group, encouraged people to take advantage of the flat market conditions.
“In Perth it's a classic case of confidence being below fundamentals,” he told the paper.
“At some stage in the next 12 months it will be the perfect buying market in Perth.”
In an interview with WA Business News in July, Psaros managing director Mike Enslin said developers had been “forced to drive down prices to a point where I’m of the view they can’t go down any further”.
“If you’re a buyer it’s certainly a good time to be out there, because you’re getting good deals from developers at rock-bottom prices, and the only way is up from here,” he said.
The bargain basement prices won’t last for long. As the AFR’s article points out:
“There is already evidence that some homes are priced below replacement cost — the cost of building a new home on a block — which is being seen in the market as a suggestion that the bottom of the price cycle is near”.
So how do you get your investment right? The old real estate adage “location, location, location” is a great place to start — it really is key selling point. In boom times, when property is scarce, buying in your dream suburb might be beyond your means. But now is a great time to get into a highly desirable area.
Even when it’s a buyer’s market, the fundamentals remain the same — and the first lesson is you have to think about resale. Down the track, when you want to sell, what will make it attractive to prospective buyers? So look for a property that has desirable traits. Maybe it’s in the inner city and close to cafes and restaurants. Maybe it’s close to the beach, or has excellent public transport links, or is near a good school. This is all about lifestyle — not just for you but also for your future buyers.
The kind of property you choose is also crucial and getting it right will help you see a better return on your investment in the future. Size, age, construction material and facilities are all factors to consider. Will spending a little more to buy a three-bedroom place offer a better return on investment long-term than a two-bedroom place? Will an apartment in the inner-city be easier to sell than a small house and garden in the outer suburbs?
Also consider what it will cost you to live. People often forget about the time and money it costs to commute to the city every day (driving from Joondalup daily, for example, costs more than $22,000 a year).
People also forget the running costs. Consider what it is made of, the thermal properties, and how much it might cost to heat or keep cool. Investing in a property that comes with good insulation and solar power, for instance, will help to keep your costs down and future-proof you against energy price rises.
These are all factors that will also help make it more desirable to renters, too.
In short, it’s an excellent time to invest in property in Perth. The buyer’s market means developers are lowering their prices and offering incentives to potential investors — making it the best opportunity in years to get into a highly desirable area. But don’t just choose the best deal, make sure you choose the best property, too — one that will save you money, attract higher rental yields and, ultimately, capital returns when you decide to sell.
If you’re keen to take advantage of the market conditions, Psaros has a range of developments in Perth. Have a look at our current projects or give us a call.