Market trends – what you need to know and where the market is heading. September 2015

Springs is here!. We have a new Prime Minister (again), the Grand Final is around the corner and the history books tell us that this is the time of the year when it all happens for the property market. Or is that just an urban myth?

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 further down the page.

1. Jobs

Since March the number of jobs advertised in Perth has slowly but steadily increased by around 200 more new jobs per month. This number is currently at around 10800 and there has not been any significant change.

 
(source seek.com.au).

Looking further back to late 2014 the number of jobs were swinging from high 11000 up to 13000 so the local employment market is still down a little but at least we are steady.

2. Rental Market

As a landlord 2015 has not been a good year with an increasing vacancy rate and a decreasing median rental income. To make matters worse this trend is continuing with the vacancy rate at 5.2% compared to 12 months ago when the vacancy rate was at 4.1%. This means that property managers are receiving fewer enquiries for available rentals.

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 the best at times, there are ways to increase your net cashflow if you own an investment property.

For tips on how to increase your cashflow 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

Buyers have even more to choose from than a month ago as another 463 extra properties are currently on the market. However, there are nearly as many transactions taking place (around 90%) as took place 12 months ago when the market was different.

(source REIWA).

(source REIWA).

………So what does all this mean for you?

Take away message

As a buyer

Now is a good time to go property shopping. The property market is not going to change anytime soon so be patient. 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. Attractive properties will always be snapped up quickly so it is important that you do your research first so you know when a good property presents itself. There as nearly as many buyers looking today as a year ago, so you may still find a property that has the interest of other buyers.

As a Landlord

Be aware that tenants are spoilt for choice. Some tenants maybe not be aware of this but 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 the same for the rest of the year.

If you are an investor looking to sell your property it is worth considering selling when the lease is near the end as there will be more owner occupiers than investors looking. Selling a property with a long term tenant is becoming more difficult, particularly if you own a property less than 50sqm.

Family homes and first home owner properties are still in good demand. Consider what type of buyer is going to make an offer on your property before going to market.

Readers should always seek their own independent advice prior to making any decisions regarding property or finances.