The election is finally over… So what?
After what can best be described as a very long election campaign that was dragged out even further by the seemingly endless counting of votes we are hopefully able to get back to normality sooner rather than later.
But what does that mean for the Perth real estate market and what can we expect?
An election seems to hinder peoples ability to make a decision. This election was no different. I have lost count of the number of buyers and sellers who have been indecisive and holding off until we all know who the new Prime Minister is going to be.
Traditionally, the Winter period is a quieter time in the Perth real estate market with less activity than Autumn and Spring. However, 2016 shapes up to be somewhat different. The clever sellers are not only getting ready to get their property ready for sale now but they are also looking at going to market to beat the expected competition in Spring.
My expectation for the next couple of months is that a lot of smart sellers targeting owner occupiers will go to market sooner rather than later. As a result, I don’t expect a flood of new properties coming to market after the AFL Grand Final.
There is not much of a change in the job situation. Currently there are around 8600 advertised jobs (13 July). This year the number of jobs have hovered between 8500 and 8800 jobs advertised on Seek.
2. Rental Market
The vacancy rate is at 6% compared to a year ago, when the vacancy rate was around 4.1%. From our corner of the market, we have experienced a number of applications on our current property managements which has resulted in finding a tenant quickly but the market statistics illustrate that finding a tenant is still very difficult.
Landlords in the CBD can also expect another tough year with more new developments being completed. It has been reported in the media that up to 8000 new apartments are being completed in 2016 and a large portion of these will be investments and at least 3 large pre sales projects have recently been put on hold because the developer has been unable to secure enough pre-sales.
For tips on how to increase your cashflow on your investment property click here.
The advise to investors has not changed. Secure your current tenant at the same rent they pay now if possible. There is a good chance that you need to be prepared to reduce the rate to keep the tenant. Otherwise, you risk a period with a vacancy and more than likely you have to reduce your asking price to find another 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
In comparison to the last update, the number of properties has decreased again, which is good news for property owners.
Although the median house price is yet to be released it is expected that we are going to experience another drop in prices. Inner cities suburbs experienced around a 5% decrease in the median prices in 2015 and there is no indication that this trend will change anytime soon.
………So what does all this mean for you?