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August 7, 2015 | Media Statement
Perth’s property market may have softened, but there are still opportunities for the astute investor, according to Perth buyer’s agency, Property Wizards.
Buyer’s agent Trevor Dunkley said the soft market can be good news for buyers, with more choices of properties available, less competition and more room to negotiate.
“Right now there are many areas in Perth where relative demand is strong, supply is low and growth drivers are keeping pressure on prices.
“Finding a property that ticks the right investment boxes and holding it as long as possible is the surest way of succeeding in creating wealth through property.”
RIDING OUT A POTENTIAL ECONOMIC DOWNTURN
Mr. Dunkley said that despite predictions of a small property ‘correction’ in the real estate market, he does not see the market declining over the long haul.
“Perth still has a large resources industry that will continue to operate in the long term, as the investment driven growth behind the mining boom transitions to an export-led production phase which should last for many years.
“The transition is causing some economic pain now, but as the market adapts to the new conditions Perth will see new opportunities in previously neglected industries such as tourism.”
He said that between the $3billion being invested by the tourism industry and the State Governments massive infrastructure investment, Perth’s economy is beginning to grow in new ways no longer connected to mining.
“While population growth has slowed, people are continuing to come to Perth, drawn by the employment and lifestyle opportunities on offer.
“There is still a need to house these extra people and land in the Perth metropolitan area is set to become scarcer and more expensive as Perth’s housing shortage continues.”
OVERSUPPLY PRESSURES LIKELY IN SOME AREAS
Mr. Dunkley said there are areas likely to be hit by an oversupply of homes and apartments, at least in the short term.
“Some areas have many projects underway or coming to completion over the next two years, and the wide range of options for buyers and renters can make it difficult to maintain selling prices or rents, driving prices down,” he said.
“Rivervale and Belmont, for example, will soon see the completion of many development projects, resulting in competition for tenants and buyers.
“However, with Perth’s housing shortage set to continue, and with these areas close to many of the amenities that are attractive to tenants and homeowners, any oversupply is likely to be temporary,” he said.
“Further, areas such as Spearwood, Beckenham and Coolbellup have experienced less new apartment development relative to the size and population of the area, and still provide attractive amenities for residents.
“Areas like these are not showing signs of oversupply and should hold their prices.”
INVESTMENT OPPORTUNITIES COME DOWN TO LOCATION
Mr. Dunkley said that in a soft market, those pockets of Perth that can be expected to perform well are those which meet the key needs of potential residents.
“Investors and homebuyers are often attracted to the new housing estates offering brand new house and land packages, but these are generally poor investment options,” he said.
“They are usually more than 25 km from the city and lack many of the amenities that astute buyers and tenants desire, such as good transport, infrastructure, schools, shops, and leisure facilities.”
Mr. Dunkley said there are three simple factors that are routinely prioritized by potential tenants in Perth.
“Easy access to the CBD or major employment hubs is possibly the most critical growth driver, followed closely by access to amenities such as good schools, shops, transport, medical and leisure activities.
“The third is distance to the ocean or rivers, with not only the coastal suburbs but those one or two suburbs in from the ocean also benefitting from residents enjoyment of the beach going lifestyle.
“If you allow these three considerations to guide your investment purchase and are sure to do comprehensive research or consult an independent professional, you can be confident in backing a winning property no matter the state of the real estate market.”