WESTERN AUSTRALIA’S ECONOMY HAS HAD SOMETHING OF A REALITY CHECK IN RECENT TIMES – BUT THERE IS A SILVER LINING TO THAT FOR MANY NEW HOMEBUYERS.
It is true that in the past 12 months, we have really seen the knock-on effect of a national slowdown in mining as it puts the brakes on some parts of the economy. But it also appears to have put the brakes on Perth’s rapid rise up a ladder we would rather not top.
In May 2008, Perth’s median house price was the second highest in the country at $513,000. Today, Perth has fallen well behind other capitals (which is a good thing) and our median house price of $530,000, is significantly lower than Sydney’s $880,000 or Melbourne’s $620,200. (1)
Availability of land, keen competition, sustained low interest rates and a greater choice of innovative, affordable product is good news for new home buyers and renters looking to transition into a place of their own.
There is good value to be found in property right now in Perth – and first home buyers in particular are making the most of it. WA Department of Treasury figures show first home owners applying for the Government’s grant are becoming more active with almost 1620 applications in July, the highest number since the same time last year.
On average, those first home owners were paying $470,000 for their new property 12 months ago, compared with $445,000 today.
Recent Australian Bureau of Statistics figures also show that the number of first home buyer commitments, as a percentage of the total, rose to 15.9% in June 2015 from 15.6% in the previous month. (2)
Data from the UDIA’s latest research and the WA Department of Treasury also offers an interesting insight into where and what people in the current market are buying.
The most popular areas for first home buyers in recent months have been Baldivis, Byford and Wellard, south of Perth; and Alkimos, Ellenbrook and Yanchep in the northern corridor. In the year ahead, don’t be surprised to see suburbs in Perth’s eastern corridor appear more frequently among most popular lists, with a number of developers increasing the supply of quality, affordable land and investment in community infrastructure.
The challenge now for first-homebuyers is to get good advice about market conditions, making the decision to purchase while interest rates are low and prices are favourable. Wait too long and the market may have shifted in favour of the seller, making it more difficult to get the home you want at the price you want to pay.
(1) http://www.yourinvestmentpropertymag.com.au/market-report/wa/wa-excerpt-from-the-2015-august-market-report-202353.aspx
(2) http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0