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January 12th, 2016 | Media Statement
There has been an increase in investor confidence in Perth as the real estate market shows signs of stabilising, according to Perth buyer’s agency, Property Wizards.
Managing director, Liz Sterzel, said that her team has seen an upsurge in enquiries from both local and interstate investors over the holiday period.
“We are seeing a number of enquiries from Eastern seaboard investors who feel that Sydney and Melbourne are still overheated, and that with Perth’s market being at a low, the time is now right to invest.
“Local West Australian investors with a more up-to-date picture of Perth also seem to be far more positive about the Perth property market, though it is early days yet,” she said.
WARY INVESTORS RETURNING TO PERTH MARKET
Ms. Sterzel said that interstate investors were wary of Perth in 2015 because of the negative data, particularly surrounding the changes and job losses in the mining industry.
“However, with other industries such as tourism taking up the slack, and population growth still faster than most other states, investors are starting to see reasons to be confident in Perth,” she said.
“Investors who do their research can still find promising properties, with the most popular strategy being to find an add value property with potential to enhance the market’s natural performance.
“We are also finding that accurately priced properties with extra add value opportunities are selling well, while those that are overpriced or have less potential are continuing to sit on the market and experience discounting.”
RENTAL DATA SHOWS SUBTLE SIGNS OF IMPROVEMENT
Ms. Sterzel said that the rental market is showing good signs at the moment, as reflected by the slight rise in median rent shown in REIWA’s data, however progress is likely to be slow.
“The slowdown in the rental cycle took place over a long period, and it will probably take a while for rents to climb back up,” she said.
“With the market in recovery, it is important for investors to focus on holding on to their tenants wherever possible, so as not to lose overall rental returns through vacancy.
“Investors should keep in mind that rentals went through a significant growth period in recent years and are still fairly high compared with historical returns.”
“Overall, Perth’s property market appears to be quietly confident as 2016 gets underway and buyers who held off in the lead up to Christmas get a head start on their New Year’s resolutions to build wealth through property.”