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Is it a good time to buy an investment property in Perth, Western Australia?
March 2009 - March 2010 trend. The Perth property prices seem to have finally bottomed out in the March 2009 quarter after last year’s fall of 12%. However, a year down the line, they are now bouncing back with some segments of the market tipping to the seller’s favour. October 2009 was particularly good for sellers, showing a great buyers confidence. The whole of the Perth market moved at 6.5% on annual basis, recovering more than 50% of its losses.
A healthy rebound in volume and sales prices in the second half of 2009 was initially driven by first home buyers constituting 40% of all market activity. The growth trend was later helped by a return to the market of the trade-up buyers.
Over the last couple of months, there has been a strong turnover amongst homes valued at between $500,000 and $600,000, but also more expensive homes under one million, especially in many Northern Beaches suburbs. Homes under the median price of $500k have seen a decline in sales during October and November 2009 when compared to the September quarter.
For Perth investors: the vacancy rate has jumped significantly and is now sitting at 4.6%. Many new developments of brand new apartments have flooded the market in the last year, giving more options to Perth renters. East Perth and other central areas have secured abundance of brand new rental properties.
The Perth housing market appears to have returned to normal. The healthy equilibrium might be only temporary. What will happen when the first time buyers run out of steam and the traders up get caught in the higher interest rates is only to be seen.
Well, something good came out of it all. After all the global financial turmoil, when the market realities kicked in, the Perth property buyers realized that it was their money and their borrowing power that was moving the Perth property market and not the other way around.
