So have we hit the bottom of the market or is there still further to go? It’s the question on every Perth property buyers lips but one to which there’s no obvious answer, because the Perth market is not homogenous and so much in relation to our current performance seems to rest on what buyers think the market will do.
If buyers overall believe prices will continue to fall they’ll hold off buying and prices will slip accordingly. But if sentiment starts tipping the other way, so will prices. Reporting of the performance of the property market now seems to resemble the stock market, with punters relying on daily predictions of the next crash or boom and being swayed in their purchasing decisions accordingly. The smart money though is doing what they’ve always done – ignored the hype, focused on fundamentals and bought for the long term.
So what happened in 2015?
Overall, 2015 has been a tough year for the Perth property market with the number of properties listed for sale steadily increasing to 16360 at the 1st of December, the highest since April 2011. WA’s population growth slowed considerably and sales volumes have been well down on the 15 year average. Median rents slipped back to $400 per week and the changes to the First Home Owners Grant saw first home owners begin to turn away from the established market. “Fickle” is the word I’ve been using to describe it.
On the bright side, quality properties are still attracting strong buyer interest, with one home I recently sold attracting more than 10 offers and selling for almost 20% more than the marketing price. Buyers are still there, but the right conditions need to be created to encourage them to buy. We’re still seeing too many sellers listing their properties for sale at a “hope” price and ending up in the game of discount death by a thousand price cuts. As a strategy it fails to find the buyer that’s prepared to pay the most for a property, but it’s one that agents and their sellers consistently fall victim too if an agent is desperate to win a listing and the seller all too ready to believe them.
Who knows? Prices could go up, down or sideways – or all three depending upon the type of property, price point and suburb you’re in. What I do know is that we won’t know we’ve hit the bottom of the market (the market being measured by Perth’s median price) until it’s been and gone due to the several month lag between when sales occur and prices are reported – so trying to pick it is next to impossible.
In my view there is, and has been for several months now, an opportunity to pick up near city investment stock at prices not seen for years, and if you’re happy to do some renovations there seem to be some terrific buys out there. The gap for trader upperers has narrowed considerably for some premium suburbs, but beware of falling into the trap of fixating on buying a bargain – cheap is usually cheap for a reason and you’re not going to be the only buyer chasing a quality property.
And if you’re selling? Be realistic and seek good advice. Don’t fall into the trap of becoming another sign for an agent that can’t, or won’t, be honest about the state of the market for your type of property.
If you’d like more specific suburb information or an update on your home or investment please call me on 0405 812 273 – I’d love to help. Cheers, Natalie