Christmas is only around the corner and the weather is heating up!
2017 has been a mixed bag for the property market. Low stock levels across the Western Suburbs have kept prices on an even keel with the average days on market still well below the state average (for those homes priced correctly). Nedlands current median price is sitting on $1,445,000, with a small decline in prices year on year of 3.7%.
The media has paid a lot of attention to Nedlands over the last couple of months with the suburb recording the lowest available stock levels of all suburbs. So what does that mean for prices and the next 12 months?
Over the last year Nedlands has had 124 property transactions with a good level of sales at all price levels. The demand for properties in the $2M+ bracket has been strong with buyers happy to open their wallets for homes that are high quality with contemporary layouts. It seems that time poor buyers are happy to pay top dollar for the finished product with 25 sales in 2017 over the $2M mark.
However, even with the large number of buyers, the need to price appropriately is essential. It still remains the case that if homes are priced appropriately and marketed correctly, then they are generally under offer within 14 days, many this year selling 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! Homes that are overpriced are still languishing on the market with many sitting there for 6 months or longer.
More than ever we are operating in a very educated and information rich environment with all buyers and sellers having a plethora of cheap up to date information available to them. This means that the old fashioned ‘Gumtree’ method of selling (advertising it for a higher price and factoring in a discount) only leads to disappointment.
We are well into the Spring/Summer selling season and most buyers are bemoaning the lack of stock, a story that we have come to know only to well over the last 18 months. However this high demand for property is not putting upward pressure on prices, in fact, I believe the low stock level and low interest rates is the main driver of prices staying stable. This situation could change very quickly if the number of homes available for sale increased.
Investors continue to be under pressure with banks now being forced to keep the number of investor loans under control with tighter regulations being enforced by APRA. Most of the major lenders have investment loans substantially higher than owner occupier loans with rates approaching 6%. These loans are now principal and interest in the main, with interest only loans harder to secure. Tougher regulations for overseas buyers has made purchasing difficult for overseas buyers.
So what’s in store for 2018? The ‘one thing’ all agents have their eyes on as we head into the new year interest rates. Economists only get it right 50% of the time but most bets are on interest rates heading upwards towards the middle of next year. For many families already struggling under heavy debt burdens this may be the straw that breaks the camel’s back. The market is still very fragile and susceptible to any major economic or financial shocks.
As one of the state’s leading agents as well as a Nedlands resident I am incredibly passionate and proud of the amazing suburbs we call home, and will continue to sell the benefits of living in what I consider Perth’s premier lifestyle region.
I am always in the area and only a phone call away, so, please don’t hesitate to call me anytime anytime of the holiday period if you have any questions.