Well it’s been an interesting start to the year in the Perth property market. Despite the gloomy headlines Nedlands has continued to perform solidly with low stock levels prevailing at all levels of the market. Many other areas of Perth have not fared so well with the market overall declining 4.7% year on year.
As I write this update there are only 32 properties available in the Nedlands area, which at less than 1% of the housing stock of 3800, is extremely low. This has created strong demand across all property types and price levels with buyers back in force.
Personally, out at ground level, I have found that if homes are priced appropriately and marketed correctly, that they are generally under offer within 14 days, many this year at the first home open. In addition, we have found that most homes have experienced more than one offer, which is definitely not a quiet market!
So, the question I am asked all the time is “If there are so many buyers why aren’t prices going back up?” Good Question, and the answers are many. Overall WA is still experiencing negative population growth, which means less demand for homes. This has been further compounded by the ongoing levels of job loss that are still being played out across the resources industry. Some families are choosing to sell to reduce their debt and buy into more affordable housing while some are choosing to sell and lease in the short to medium term with the expectation of further price declines.
The realities are that if you are buying and selling in the same market the prevailing conditions are irrelevant. I have had several clients sell in the are at strong prices only to secure some fantastic properties at prices they would have paid substantially more for 18 months ago. Not all suburbs are equal and Nedlands is fairing better than most
Nedlands has always benefited from its proximity to the city as well as the number of hospitals and good quality schools within its boundaries. UWA continues to grow and expand adding further interest to the suburb. So many of the people that are drawn to the suburb and choosing to purchase a family home here are not necessarily tied to the commodities industry or in professions that are markedly affected by the economic downturn. This has provided further stability to the Nedlands market.
And where have the investors gone? Well the banks are putting investors under the microscope and making lending and the costs associated with it more and more difficult. Just this month APRA announced increased regulatory requirements for investors which will now leave some purchasers out in the cold altogether. Those that are lucky enough to secure new loans may find themselves subjected to increased interest rates.
The high level of vacant rental properties due to the downturn in demand as well as the decreasing weekly rents may make holding on to some properties unpalatable for investors that are already stretched. The Perth rental market is currently sitting at 6.7%, still way above the comfortable 2.5% required for a stable market. The remainder of this year will be very interesting.
As the area’s leading agent as well as a Nedlands resident I am incredibly passionate and proud of our amazing suburb and will continue to sell the benefits of living in what I consider Perth’s premier lifestyle suburb. This year so far my average days on market has been in most cases around 11 days with prices not dissapointing.
Please don’t hesitate to call me anytime if you have any questions. 0412 770 743