WA Perth market 2019

We rent and agreed to a $20 increase recently ( 400pw up to 420pw ) but the owner also agreed to a periodic lease

 

What do you guys think is a fair price on any one of these lots? Currently listed at $370k.

 

Not sure how long you did it for but was their an opportunity to continue the lease?

$250 over 52 weeks (year) is greater than $260 over 49 weeks

 

Maybe call me sexist

but is that because all the women are voting?

 

Gave them the option to extend the lease but they wanted to move for a bigger place so was a good outcome... I expected the gap to potentially be a lot worse

 

23 SEPTEMBER 2019
Perth recovery back on track: Hotspotting's Terry Ryder

EXPERT OBSERVER

The Perth recovery is back on track, having paused in the lead-up to the Federal Election. Sales activity is solid to strong in many locations and some areas have had price growth.

The Price Predictor Index published by Hotspotting reported increasingly strong signs of recovery in Perth markets in 2018 and early 2019. The number of suburbs with growing sales activity in five consecutive quarters was 39, 45, 49, 51 and 53 - undeniable evidence of growing demand in the Perth metro area.

Then the revival hit a wall. Like many locations across capital city Australia, Perth paused amid the uncertainty created by the Election and the prospect of a Labor victory and major changes to negative gearing and capital gains tax.

Tighter finance and a highly negative media also contributed to putting the brakes on the Perth recovery. For those reasons, the number of growth markets across the Perth metropolitan area was lower in our Winter survey.

Now our Spring survey shows that the decline has likely bottomed out, with a steady number of growth markets and improving number of consistency markets. There are now very few declining markets across the Perth metro area.

This comes as vacancy rates continue to tighten and rents rise. New data from SQM Research shows that the Perth vacancy rate is continuing to fall. In 2017 the rate was close to 6% and in mid-2018 it was still at 4% - but now 2.9% and trending in the right direction.

SQM Research also reports solid growth in Perth rentals, with the Rents Index up in annual terms for both houses and apartments. This source has also recorded short-term improvement recently in the city’s Prices Index.

Our analysis of median price trends shows that close to 30% of Perth suburbs have recorded growth in their median prices in the past 12 months. The list of suburbs with rising prices is dominated by top-end markets and upper-middle markets - locations with median prices above $700,000.

Mount Pleasant, which has stood out in a number of our recent surveys, continues to be a market leader with its median house price rising 14% to $1.25 million in the past year. This suburb is part of the Melville LGA which has been - and remains - one of the most solid precincts in the Perth market.

An emerging feature is the number of suburbs with median prices lower than a year ago, but with growth in the latest quarter - providing further evidence of a recent market turnaround. Most of the locations exhibiting that trend are at the affordable end of the market - examples include Two Rocks in the Wanneroo LGA (median price $370,000 - down 3% in annual terms, but up 2% in the latest quarter) and Huntingdale in the Gosnells LGA (median price $375,000 - down 1% in annual terms but up 1% in the latest quarter).

Perth, in general terms, is a capital city leader on housing affordability (thanks to several years of price decreases) and, according to one recent report, has its highest affordability reading since 2004. Against that background, a notable feature of our Spring survey is the emergence of growth markets at the affordable end of the Perth market.

The LGAs of Armadale, Wanneroo, Canning, Gosnells, Kalamanda and Rockingham all now have suburbs with growth momentum.

Another precinct attracting attention is the Kwinana LGA in the south of the Perth metro area. It has been identified in a recent affordability report as the only part of the Perth market where it’s cheaper to buy than to rent. Many suburbs have median house prices in the low to mid $200,000s, making it the cheapest precinct in capital city Australia, except for parts of northern Adelaide.

Rental yields are typically above 6%, in an area that attracts residents because it’s close to one of Perth’s biggest jobs nodes and has good transport links to the CBD, as well as good local amenities.

Terry Ryder is the founder of hotspotting.com.au

 

No surprise that inner ring is doing well. Not surprised about Huntingdale either. Don't agree with Kwinana. I would buy in Armadale over that.

 

And that's saying a lot if you'd buy in Armadale over it.
I don't agree with Kwinana either. Yes it's cheap, yes yields can be good but in terms of growth it's likely to be stunted and the likelihood of problematic tenants higher than other places.

 

I'm curious what is the driver for Mt Pleasant. OK, it's close to the River. But many suburbs are. It Perth 10 k, but many are too. Nice neighborhood. So is Applecross, etc. So just curious. I can see some parts of Booragoon being good particularly dual school zones of Rossmoyne and Applecross.

 

Its noticeably cheaper than Applecross. That might do it in itself.

 

And it got hammered before the strong rise.

 

I am interested on people's opinion of investing in Armadale. Particularly on a lot with greater than 700sqm land.

 

Strong pass from me.

 

Search finds a lot of comments on Armadale (WA)

 

Why so, I know it's classified as a low socio-economic suburb, but the council is trying to change the rhetoric, and larger land parcels in Perth in 5 years will be view and far in between...And considering the population growth for Perth as well...I find a lot of new immigrants stay in the area.

 

Yes there's still way better options imo even taking that into account.

 

That 'expert report' reads just like all the other expert reports over the past five years claiming Perth has turned the corner. Meanwhile the latest corelogic data shows Perth and Darwin median prices continue to fall.

 

This is brutal (source). I'd be interested to see a breakdown by quartiles and areas - is it still mainly the entry level stuff that's getting smashed, or are price declines more broad?

 

I'd like to know as well. There are all sorts of mixed messages but rather than a bottoming out, the corelogic data shows a worrying acceleration of price declines in recent months.

 

I would agree on the superior rental yields in Kwinana, I have a couple of IPs in Wandi and rents are high in comparison to cost, also vacancy rates in Wandi have dropped from 6.1% in December 2016 to 2.8% in July 2019 (SQM Research) so upside with the lower interest rates and depreciation is very positively geared property, so even if Capital Growth is limited the debt gets paid off and assists with cash flow.

In terms of Armadale, small developer graveyard and also has a stigma with old Armadale but not the new areas of Piara Waters. IMO I would stay away from Armadale.