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October 30, 2014 | Media Statement
Despite lower listings and sales volumes in the September quarter, opportunities still exist in Perth for buyers who know where to look, according to Perth buyer’s agency, Property Wizards.
Buyer’s agent Trevor Dunkley said some sales agents reported difficulty in findings listings, and a decline in the number of sales.
“These anecdotes are confirmed by the REIWA preliminary data for the September quarter which finds that the number of house sales dropped by 7% from the previous quarter,” he said.
“However, in the same time period the number of apartment sales are up 7% and this is a new developing trend for Perth.
“Prices seem to be holding despite the drop in volumes, with REIWA’s preliminary data showing a lift of around 0.9% in house prices for the quarter.
“Bargain hunters may be disappointed that sellers are not in any hurry to drop their prices in areas where there is no oversupply, but should take care when buying in the few areas where oversupply is likely, such as Belmont or Rivervale.
“Some buyers may be holding off, thinking they might get better prices by waiting, but as we have seen over and over, they inevitably end up paying more down the track,” he said.
OPPORTUNITIES FOR INVESTORS
Mr. Dunkley said most of the buyers he is seeing are looking for add value opportunities, where they can renovate or subdivide or even buy a home with future rezoning potential, with a lower focus on rental returns.
“Good add value properties are popular because they can give you that extra cream on top of normal market growth, but they are hard to find and prices have risen since last year.
Mr. Dunkley has also seen the market change for buy-and-hold investors, where price rises have resulted in the need to move further afield as the inner suburbs move out of reach.
“Our investors have had to accept that their same budget is buying less this year, so where they might have been able to afford a unit in Victoria Park last year, that same budget will only stretch to East Cannington or perhaps Maddington,” he said.
“Of course, rental return will always be a consideration, and while these areas may be further out, this could mean a higher rental return than seen in the near-city areas.
“While rents have declined from last year, we’re now seeing these stabilise, and in fact REIWA’s latest update for September shows the median rental at $450 per week, unchanged from last quarter.”
FIRST HOMEBUYERS COOL TO MARKET
Mr. Dunkley also noted that since the WA State Government announced changes to the First Home Owner Grant, many first homebuyers have dropped out of the market.
“First time buyers now only receive $3,000 when purchasing an established home, compared with $7,000 before the changes came into effect this time last year.
“However, the increase from $7,000 to $10,000 for first homebuyers who build or purchase a new home has meant a rise in popularity of the new and off-the-plan apartments coming on to the market,” he said.
“These options are often affordably priced and conveniently located, especially for new buyers who have been priced out of the traditional house on its own block.”