Latest: Property Market Update
It’s no secret that the West Australian property market has been challenging over the past few years. Interest rates are at historical lows and house prices have been declining which has provided great opportunity for first home buyers wanting to get into the market. However, this has caused some concern with existing home owners who fear a loss on their property if they were to sell. The east coast on the other hand has seen prices remain high even with increased inventory in the form of inner city apartments.
Listings were down 11 percent in December in Western Australia; although this was expected due to the usual Christmas slump in listing numbers. However, this did not stop the Perth median house price from rising 1.9% to $535,000 over the past 3 months. (Reiwa)
For the second month in a row, the Perth Metro median house price has increased which suggests that people in the ‘trade-up’ market are taking advantage of upgrading their old property for a more expensive dwelling purchased at a competitive market price. This stimulation gives confidence that the market next quarter may be moving in a much more positive direction. (Reiwa)
On the east it is a whole other story with prices continuing to rise in an already buoyant market. With a great deal of overseas buyers continuing to enter the Sydney and Melbourne markets, local first home buyers are being pushed further and further away from the city. In comparison; Perth households dedicate on average 29% of their annual income to service an 80% LVR mortgage; Sydney households will dedicate an average of 45%. (RPData)
Interesting figures in the report also highlight purchases of investment properties are up by 21.4% in 2016 from the previous year across Australia. With fears of prices continuing to rise within Australia, investors are taking the opportunity to break into the market, hopefully making capital gains over the next 5 years. (RPData)
Annual charges in weekly rents are highest in Sydney and Melbourne, despite having the lowest rental returns (yield). This points directly to the fact that although the east coast weekly rent income may be higher the price to get into an investment property outweighs the yield; for the short term at least.
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