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Perth Market Update for March 2016

Perth Market Update for March 2016

The year is flying past. The Easter Bunny is ready for the long weekend with all of his Easter goodies.

The first part of the year has been great for tenants and first home buyers but not as jolly for the people on the other side of the fence. However, change may be in sight.

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 around 8700 advertised (22 March) which is similar to what has been advertised in January and February . 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.


Seek 22 March

(source seek.com.au).

2. Rental Market

Steady is a fair description of the rental market as it hasn’t changed much in the past couple of months.  The vacancy rate is 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 still difficult.

Rental image

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

The number of properties on the market is leaning towards the levels we experienced in November last year and there are now more properties for sale than previously in 2016.

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.

 

Sales week ending 15 March

(source REIWA).

Currently the Median price is $540,000 (December quarter), which is up from the previous quarter. However, given the increased number of properties for sale, it is expected that the median house price will decrease again.

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

Click here for the Take Away message