The big question – should I buy now?

Everyone can agree that there is no shortage of housing market data available, however the most common information to be found is often focused on looking backwards. Reports on sales prices and changing trends are freely available these days, thanks to the modern innovations and consumer driven resources such as Realeastate.com and even REIWA. In reality, the majority of this information is free in one form or another, the key remains in the interpretation of that data and knowing how the market will react to previous events, before it happens. It is this analysis that is critical in assisting you to make an informed decision about when and where to buy.

LMW are in a unique position in the market place, with our position as a top valuation company, our buyers agents have unmatched access to a plethora of information. In addition we have experienced and qualified staff with the most up to date modern information technology money can buy. As we have watched the changes in the Perth market over the past few 4 years, we conclude that in the months of 2017 the shoots of recovery should begin to show, with a more solid uplift the year after.

We believe the last chances for good buying is this year, as we examine the following classic signs of the bottoming of the market and where they may lead us;
– In the property cycle wheel, Perth is currently positioned at the bottom of the market experiencing despondency and capitulation which we see with prices coming away. Sellers are prepared to quit their property and move on. In the media there has been a lot of doom and gloom reported in the market, reflecting market sentiment.
– The classic sign whereby building completions exceed the number of building commencements – the first trigger for supply and demand.
– Population growth has slowed significantly since the collapse of the mining boom. This doesn’t mean the end of all population growth, new demand will come from organic growth in the market, internal demand initially and then from interstate buyers.
– A declining rental market which is expected next year will splinter renters from having to opt from share house options, to having the ability to purchase their own property.
– Employment and the flow of money will not come from the resourc
es sectors but instead the agricultural sector. There has already been a significant investment in agribusiness and it continues to grow at a stable pace with major players investing heavily in food productivity in Western Australia where there is and will be significant demand for protein from local and Asian communities within our time zone.
– As the Sydney property market runs its course and investors see prices thinning in even smaller volumes they will soon look to the west. The average house price in Sydney is currently almost double that of Perth, which has not occurred for a very long time. LMW alone have already received requests from interstate investors seeking to purchase in Perth as all of a sudden our local housing market looks significantly undervalued.
– From an investors point of view, thinking about the costs of funds 5 years ago when interest rates were closer to 7% with rental returns for residential property at about 5.5%. In comparison to today’s rates which are closer to 4% – 4.5% and rental returns have moved back to 4% giving us now the opportunity to secure a great property in a great location at the bottom of the market at very little or cash flow neutral.
– While we are sitting close to the bottom of the market, it means that Perth is now one of the most affordable cities to invest in. According to CoreLogic, Perth has shown signs that it has moved through its lowest point of the downturn, despite the market having dropped 7.9% since the drop began in 2014 in the final quarter of 2016 we saw an increase in value of 2.8%.
– In comparison to the booming cities such as Melbourne and Sydney, Perth has still retained balanced rental yield rates in comparison with its sale prices. The median house price in Sydney for 2016 sits at $991,000 with the rental yields only at 2.8%, fine for.

We encourage our clients not to sit on their hands and wait to read about the market recovery in the news, because again, this will be based on statistics of events that have already occurred. By the time the data supporting a recovery in the market is written about in the media the market will have already moved.

Our recommendation as independent buyers’ agents and property advisers is to contact your finance broker who will source a competitive loan deal and then use your buying opportunity wisely.