How’s the market?
By Veronica Macpherson
Licensee / Director at MACRO Realty
This is something I’m regularly asked by sellers, buyers and developers. My answer – it’s a great buyers’ market here in Perth and a booming investor’s market up North.
The number of properties on the market is currently around 15,500, which is still well above the equilibrium of around 12,000 properties and the average number of selling days (the time it is taking to sell a property) is 77. We are somewhere between 5.30 and 6 o’clock on the property clock in my opinion, definitely time to grab a bargain and not the time to sell.
Interestingly, the capital growth rates of the property markets in the Pilbara are the opposite to what we’re experiencing in Perth, riding on the back of the mining and resources boom with no signs of slowing; towns such as Port Hedland, Newman and Karratha are on track to double both their export output and population growth in the next five to ten years providing the production of new housing and accommodation solutions can keep up the pace.
What’s driving the solid capital growth rates and high rent returns of properties in these locations is an extreme shortage of housing. Currently rent returns in the Pilbara can achieve 10-12% per annum, and with interest rates around 6.5% investors can create an attractive second income for themselves.
My advice to home owners at the moment who are thinking of upgrading or downsizing is that the state of the market will make little difference to you if you’re transacting in the same market. For example if you are going to sell for a lower price, you should also be able to buy at a lower price and vice versa.
My advice to investors is to not sell if possible, it’s simply not the time and if holding costs are an issue, a cash-flow-positive investment property ‘up north’ might be just the thing for you.
For more information on the opportunities with Pilbara property investment, have a look through the information on our website, contact us or attend one of our free seminars or webinars.