Perth Market Update for January 2016
It is last day of school holidays (parents are probably looking forward to school starting more than the children) and with Australia Day behind us, some people say that Australia day marks the end of summer.
Bronwyn and I have both been busy the first weeks of this year already. Having leased out 5 properties already and dealing with lots of buyers, there has been lots of activity in January.
On a more personal note, January also marks the 1st anniversary of Mavin Real Estate and we thank you for your support as we have been overwhelmed with the repeat business and client referrals.
Below are our market indicators that will provide clues on what to expect over next couple of months.
If you like to skip the details and go straight to the summary, please go straight to the Take Away section or click here for a short cut.
1. Jobs
Throughout 2015, the number of jobs advertised on Seek within Perth Metro area were relatively constant, hovering around 10000 jobs advertised with the peak in August. Currently there are 8500 advertised which is similar to January in the previous couple of years. Given the bad news coming out in the media about construction projects being completed and employees being made redundant it appears that other industries are still looking for employees. It is clear that given the end of the mining boom, people in those industries are now heading overseas or over east for employment which has an effect on the housing market.
(source seek.com.au).
2. Rental Market
Landlords have not had a good year in 2015 due to increasing vacancy rates and a decreasing median rental income. Unfortunately, there is no end in sight for this trend, with the vacancy rate now 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 becoming harder.
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.
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
The number of properties on the market is down a little but similar to the jobs advertised, it is due to the festive season. It is expected that the number of properties will going up in the next couple of weeks, as February is traditionally a busy month for buyers and sellers.
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. The good news for home owners is that interest rates are still steady according to REIWA with CPI rise of only 0.5 per cent in the December 15 quarter.
(source REIWA).
Currently the Median price is $531,000 (September quarter), however it is anticipated that the next quarter (December 2015) will be closer to $500,000 and the number of selling days will more than likely exceed the current average of 67 days.
………So what does all this mean for you?
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