2017 real estate forecast: property experts share their tips

NOW is the time to buy your next home, especially along Perth’s premium coastal stretch and in riverside suburbs, according to Perth’s leading property experts.

The overall consensus is that while low buyer confidence is unsurprising due to job insecurity with the slowdown of the resources sector in 2016, this has led to an oversupply of stock in the housing market, meaning buyers and renters have the upper hand.

The building boom and slow population growth have also contributed to the growing number of homes on the market.

According to the latest Housing Affordability Report by the Adelaide Bank and the Real Estate Institute of Australia, housing affordability in WA is on the upswing.

“This is a notable improvement over the [past] year and good news for prospective homebuyers looking to enter the market or find their next home,” Real Estate Institute of WA president Hayden Groves said.

“It’s a good time to buy and I would advise those looking to purchase a property to take advantage of the improved affordability before the market lifts again.”

Residential experts are expecting another six months on average before the market lifts in favour of sellers due to an increase in consumer confidence, most likely after the state elections have settled.

Reiwa.com’s latest data for the three months to December 2016 shows the Perth median house price increased 1.9 per cent to $535,000.

“Since the second half of 2016, we’ve seen prices across the metro area start to lift on a monthly basis,” Mr Groves said.

“If you’re a buyer waiting for the ‘bottom of the market’, you would be wise to make a buying decision soon should this trend continue.

“The benefit of buying now is that there is currently less competition from other buyers, so you’re more likely to find a home or investment property that genuinely meets your needs.”

Satterley Property Group chief executive Nigel Satterley

What is your opinion of the past year in Perth real estate?

Australia is one of the greatest countries in the world to invest in residential land development.

Property is a very sound investment product and I believe Australia will benefit greatly from Brexit and the Trump election.

We have seen other Australian states take off; however, Perth is still in the lower end of the property cycle.

Over the past 12 months, we have continued to see a slight adjustment with a decline in prices in WA.

Even though we have had steady and low interest rates, consumer confidence has been down due to job security and the decline of the resource sector.

What everyone must remember is that the property market is cyclical and Perth will have its time again.

Property is a safe, long-term investment for families.

What are your predictions for the market for 2017?

I don’t believe we will reach recovery mode in the property market for at least another 18 months, so this year will be very similar to the past year, which makes 2017 the right time for those wanting to upgrade, invest or enter the property market for the first time.

There may be another slight adjustment to residential prices before it bottoms out.

It’s absolutely a buyer’s market and the perfect time to enter or buy that investment property.

What are your top tips for buyers and sellers looking to make their move in the local market this year?

The most important thing I tell people is to do your homework.

Look for the best deal and be a hard negotiator.

And when I say deal, I don’t mean the cheapest – price is an important factor but look for real value.

Not only is housing more affordable and interest rates at a record low, the State Government’s recent announcements to increase the First Home Owners Grant from $10,000 to $15,000 until December 31, 2017 and Keystart (low deposit home loans) to increase the income threshold by $20,000, will assist more West Australians with their homeownership dream.

In the property game, it’s important for buyers to strike while the iron is hot to get the best price and value for money.

I don’t think we will see conditions like this in Perth again for a very long time, if ever.

Look for areas close to public transport, shops, medical facilities, schools, recreation, transport links and employment areas if you want your investment to increase in value over time.

Remember, the value is always in the land.

For sellers, my tip is to realise the market is what it is.

If circumstances mean you must sell your home in this soft market, then you must price it accordingly.

You can’t expect to sell it for more than it’s worth or what you would have got for it or even what you bought it for a few years ago.

If you want it to sell, you must sell it for what it is worth at today’s price.

Blackburne founder and managing director Paul Blackburne

What is your opinion of the past year in Perth real estate?

The property market is comprised of many different markets, depending on the type of property.

Land sales and established homes sales were slower than usual; however, apartment sales for good projects were solid.

Some apartment projects were slow to sell but good projects that are well-designed and well-priced had steady sales.

Enquiry was very strong for apartments from local owner-occupiers; however, many people are waiting to see what happens this month.

What are your predictions for the market in 2017?

It is a normal part of the market cycle that there are a few years of strong growth followed by a few years of slower or even negative growth.

We have now had two years of no growth and most economists predict that 2017 will be the year that the market in Perth starts to grow again.

Now is certainly the time to buy as there is very little new apartment stock on the market and we see a significant shortage of apartments coming in 2017 and 2018.

There simply isn’t enough apartments being built to keep up with demand.

There is a large shift towards more apartment living – currently around 15 per cent of people live in apartments and this will move closer to 30 per cent soon.

What are your top tips for buyers and sellers looking to make their move in the local market this year?

Do your research and ensure you are buying from a trusted developer.

Buy property types where there is a demographic trend towards increasing demand, such as apartments.

Think about whether you really need a backyard and whether you want to be living a long way from activity and the city.

Perth has become a far more vibrant and liveable city, so far more people are wanting to be closer to the activity rather than stuck out in the suburbs.

If you’re a first-home buyer, it’s a great time to buy, especially given the First Home Owners Grant increase to $15,000.

Many people buy apartments off the plan for their first purchase, which gives them time to keep saving more for a deposit but secure something while the prices are low, and there are a wide range of options.

Acton chief executive Travis Coleman

What is your opinion of the past year in Perth real estate?

2016 was a challenging year for the Perth property market due to slower population growth and a weakening economy.

This was reflected in more competitive property prices, which towards the last quarter of the year resulted in a greater level of buyer enquiry.

The number of houses listed for sale also stabilised and even declined in some areas of Perth over recent months, which is another positive sign for the property market.

The median house price also stabilised and that is an indication that the Perth property market has reached the bottom of the current property cycle.

What are your predictions for the market in 2017?

This year should see a revival in the fortunes of the Perth property market due a number of factors.

Firstly, Perth property is now among the most affordable of any capital city in Australia.

This affordability is highlighted by the fact that the ratio of annual income in WA compared to the median house price in Perth is now 5.6.

In comparison, it now takes 10.4 times the annual salary for someone living in NSW to buy a house in Sydney and 7.8 for Melbourne.

As a result of this trend, first-home buyers should be very active in the Perth market, as well as upgraders during the year.

Recent changes to the First Home Owners Grant should also add an extra incentive to young buyers wishing to enter the property market.

Consumer confidence should also begin to improve, with green shoots now appearing on the resources sector with an upswing in commodity prices, especially iron ore.

Because of Perth’s affordable house prices, we should also see more activity from eastern states investors in the WA market over the year.

At the same time, the supply of houses should start to tighten as new building approvals in Perth have been on the decline for over 18 months.

In particular, that should bring some good news for landlords who have been battling an oversupply of rental properties during the past year and have had to cut rents substantially to meet the market.

What are your top tips for buyers and sellers looking to make their move in the local market this year?

If you are a seller, invest your time in finding the best real estate agent you can.

It is a buyer’s market and as such, the role of the real estate agent in achieving a pleasing sale for your property is paramount.

Don’t choose an agent who promises the top selling price; check their track record and make sure they are backed by a reputable agency with a large network and elite marketing strategy.

If you are a buyer, focus on location, location, location.

Now is a great time to buy a well-located property in Perth for a competitive price.

Properties in a prime location will achieve stronger capital growth over the long term.

A property does not have to be in an expensive suburb to be in a prime location.

For example, if you are buying a house in a new residential area, the property could be located overlooking a park or lake, which will make it more appealing to future buyers compared to other properties in the estate.

Peard Real Estate Group chief executive Peter Peard

What is your opinion of the past year in Perth real estate?

2016 could be best described as a buyer’s market with the supply of homes for sale far outstripping demand.

As a result, the property market became very price sensitive and sellers needed to set a realistic selling price that reflected the local market.

The rental market was also under pressure and landlords similarly needed to be very price sensitive when setting their rents.

Weak consumer confidence was the main reason for the depressed nature of the local property market.

Buyers were hesitant to make a decision due to financial issues over job insecurity

At the same time, the building boom in WA over the past three years led to an oversupply of homes, during which time our population growth slowed significantly.

Overall, it was one of the toughest years in my real estate career, which has spanned more than two decades.

Like other industries, the current economic situation in WA will lead to a further rationalisation of the real estate sector, with smaller companies under pressure to combine with larger and more efficient businesses.

What are your predictions for the Perth market in 2017?

The fundamentals are in place for a recovery in the Perth real estate market during the second half of 2017.

Housing is very affordable and this is underlined by the fact that WA now has the highest proportion of first-home buyers in the owner-occupier market nationally, according to the latest data from the Real Estate Institute of Australia.

The only factor that is missing in driving a recovery in the Perth property market is consumer confidence.

My prediction is that there certainly will be an improvement in the Perth property market but will most likely not occur until the second half of 2017.

In the meantime, now is a great time to buy property in Perth especially in prime locations near the ocean and river.

Savvy buyers are already taking advantage of Perth’s competitive prices, with Peard recording rising interest in the $1 million-plus market, where big price discounts are now on offer.

Currently, there are great bargains to be had in prime coastal suburbs stretching from Mindarie to Mandurah, as well as riverside suburbs close to the Perth CBD.

What are your top tips for buyers and sellers looking to make their move in the local market this year?

If you are in the market to buy a property, then my advice is to do so within the next six months.

The Perth property market is at rock bottom, so now is the time to get in before recovery starts.

Excluding prime coastal and riverside suburbs, the oversupply of new apartments will create great buying opportunities over the next six months for people who want to enjoy this type of lifestyle.

If you are a seller, you need to have all the three Ps correct before you list your property for sale – price, presentation and promotion.

Buyers are very selective and sellers will need to take the time to ensure that their property has a compelling reason for someone to buy it.

Sellers need to listen carefully to their real estate agent and act on their advice more than ever to secure a buyer.

Momentum Wealth founder and managing director Damian Collins

What is your opinion of the past year in Perth real estate?

Generally, it was a tough year for the Perth real estate market in 2016, which was a result of elevated supply and lower demand.

On the demand side, the slowdown in the resources sector continued to weigh on Perth’s median dwelling prices as the state adjusted to lower private investment, higher unemployment and lower population growth.

On the supply side, dwellings completions reached high levels, which brought plenty of new stock to the market.

While property prices broadly cooled over the past year, in more recent months we’ve seen prices begin to steady.

The rental market also softened further as rental rates dropped and vacancy rates rose, leading to longer times of market.

What are your predictions for the market in 2017?

We expect the soft conditions to continue into the start of 2017, however there are some green shoots starting to emerge that provide some promising signs we’re close to, or at the bottom of, the current down cycle.

On the supply side, residential building completions have likely hit their peak in the current construction cycle, even with the recent increase of the First Home Owners Grant to $15,000.

The grant changes will increase supply, albeit marginally above what it would have been, which may slightly delay the recovery in the market.

However, with a slowing number of building completions there will be less overall new housing supply coming to market in 2017, which will help to rebalance the demand and supply drivers and provide a floor for property prices to settle.

On the demand side, we’re seeing some confidence returning to the market as commodity prices firm and as the state continues to transition to a more sustainable, diversified economy through tourism, education, hospitality and professional services.

We expect buyers to continue to have the upper hand heading into 2017, with elevated stock levels and fewer purchasers in the market.

However, as the supply and demand drivers continue to rebalance, so too will the power shift from buyers back towards sellers, which is more likely to start to occur later in 2017.

What are your top tips for buyers and sellers looking to make their move in the local market this year?

For buyers, be it owner-occupiers or investors, it’s a highly favourable time to be in the market with high stock levels and fewer purchasers.

Therefore, buyers can afford to be picky and negotiate hard on price and contract terms and conditions.

It is a buyer’s market, so there are plenty of good opportunities to find great properties at very reasonable prices.

For sellers, it’s important to list their properties at reasonable prices to be competitive and achieve high buyer activity early in the sales process.

This will help to sell the property more quickly and avoid it becoming stale on the market.

It’s beneficial to pay for a premium listing on a property search portal so it remains at the top of search results.

If the property isn’t receiving much attention initially, sellers should change the property’s profile photo to provide the allure that it’s a new listing.

They may also need to adjust their sales price.