July 2015 Market trends
What you need to know and where the market is heading.
We are now towards the end of July with morning temperatures providing no incentive to get out of bed there so there is no doubt that we are in winter. The Perth real estate market is also in winter mode. The market is slow to get out of bed too but for the ones getting up and about there are still great opportunities.
Outlined below are some of the market indicators that will provide clues on what to expect.
(If you just want a quick snapshot without the detail go straight to the Take Away Message section).
In the past 3 months the number of jobs advertised hovered around 10600 jobs. From the June update it is status quo but the advertised jobs are up by 300 jobs from the snapshot in March.
Looking further back to 2014 the number of jobs were swinging from high 11000 up to 13000 so we are down a little but at least we are not going backwards.
2. Perth Rental Market
There is no doubt the rental market in recent months has been tight if you are landlord, however, it appears that the worst is yet to come. The median rental price has dropped by an average of 5 per week and the vacancy rate is now at 4.9% which means that property managers are experiencing less enquiries for available rentals. There is a suggestion that the vacancy rate is going to reach 6% in the next 12 months. Having said that the completion of a number of city based residential blocks is likely to be a contributing factor. As such, there are no signs that things are going to change in the near future.
Although increasing the rental income seems difficult at best at times, there are ways to increase your net cash flow if you own an investment property. For tips on how to increase your cash flow on your investment property click here.
As an investor, secure your tenant at the same rent they pay now. If you have to find another tenant you may have to drop your rent to attract a good tenant. As a landlord, if you are looking at selling your investment property now is a good time to list it for sale.
This is especially the case if a lease is due to expire in the next three to six months, as you can expect a lower rental yield.
If you are thinking of selling your investment click here to discuss your situation
3. Properties for Sale
Since the last update a month ago, the number of properties on the market has decreased to around 13787 properties for sale. As such the market is a little closer to a balanced market but it still has a long way to go. Therefore, buyers still have the upper hand. Looking at number of sales compared to last year there is not much of a difference, so there are still buyers out there, it is just that they have 30% more properties to choose from.
………So what does all this mean for you?
Below, is a summary of your situation as a Buyer, Landlord and/or Seller.
Take away message
As a buyer
Now is a good time to go property shopping. Consider properties that have been on the market for more than 6 weeks. Sellers that have just listed their property for sale are less likely to accept lower offers even if it is a buyers market. Be aware that tenants are spoilt for choice. Though some may not be aware of this, it would be risky to assume that your tenant is not keeping an eye on what is going on. If you have a good tenant, make sure they are happy.
Ensure that you approve repair requests from your property manager promptly and to a high standard. The side effect of regular maintenance is that the tenant will feel that they are being looked after and hopefully will be less likely to look for another rental.
For more tips on maximising your return on your investment property click here or contact Bronwyn on 0478 774 004 to discuss your situation.
As a seller
If you are thinking of selling your property, there is no point in waiting for the market to improve as the property market is likely to stay as is for the rest of the year (and possibly the following year). Be realistic with your asking price. A 6 month old appraisal or a sale of a similar property last year counts for nothing in the post boom market.
Keep in mind that you can still generate capital growth for your property, however, you just can’t rely on the market to do all the work for you.
- When selling a property, there are only 4 variables
- The location,
- The right marketing strategy,
- Presentation of the property, and
- Your agent
The good news is that you have control of 3 of the 4 variables.To discuss your situation and how you can add capital growth to your property give me a call on 0466 725 866 or click here