Positive outlook for spring property market say Perth experts

Stock image.
Stock image.

THE Perth real estate market is about to enter one of its busiest periods with more homes set to come on to the market and buyers more active in the lead up to Christmas.

Community Residential asked several property experts for their thoughts on the state of the market.

Paul Blakeley, Harcourts WA chief executive

How do you think the property market will perform this spring?
The winter months are traditionally slower in the real estate market and this year has been no different, particularly given it has been a cold and wet one.

In saying that, we have seen property prices remain fairly stable during this period, indicating that the decline we have seen over the past couple of years is slowing and even levelling out.

The mood within the Perth real estate fraternity is optimistic.

We anticipate that the warmer weather will bring out more buyers and create more activity.

Are there any areas of the market you think will be particularly active?
The top end of the market is already starting to show signs of improvement, with the most expensive homes in Perth showing a 1.5 per cent increase in recent times.

This end of the market has remained flat since the end of the mining boom in 2014, creating a shortage of properties for sale as potential sellers consolidate and retain their asset.

As the level of demand starts to increase, we have seen the rising of values in suburbs with a $1 million plus price range.

At the opposite end of the market we are also starting to see increased inquiry from first-home buyers.

This section of the market is recognising that there has rarely been a better time to buy in the West.

As confidence slowly returns due to improving economic conditions, first-home buyers are starting to take advantage.

Suburbs with a median house price under $500,000 are attractive. Some examples are Nollamara, Mandurah, Forrestfield and Merriwa.

Can we expect prices to rise?
We do not expect to see much of a rise in prices. Between now until December, we will more than likely experience more of the same.

It would appear that the worst is behind us and we will have a period now where prices plateau.

Any increases will start to appear gradually from 2019 onwards. Looking back on previous boom/bust cycles, the rate of recovery has taken as long as the rate of decline.

This particular cycle has been rather prolonged, indicating that the rate of improvement will be the same.

Paul Blackburne, Blackburne managing director

How do you think the property market will perform this spring?
Most experts agree that the Perth market will be the strongest in Australia over the coming years.

We have already started to see price increase in some suburbs and this trend will continue over the next year.

Are there any areas of the market you think will be particularly active?
As with any market, some suburbs will see stronger growth than others.

Within geographic areas there are also certain product types that will perform better than others.

We have seen a significant shortage of higher-end larger apartments in Perth.

As a result we are doing as many as we can as we see this as the highest growth area.

There are very few true high end luxury projects in Perth and as a result there is a significant shortage of supply.

Can we expect prices to rise?
We think some areas will grow faster than others.

There seems to an oversupply of cheaper housing in the outer suburbs so this means there will be lower growth than the more vibrant near city areas.

There is a strong trend towards living near established shops, cafes, bars, restaurants and public transport.

For many people, apartments offer the only affordable way to get into these areas, so we have recently seen a large increase in demand from this market.

This would tend to indicate that we will start to see prices rise over the next 12 months.

Peter Peard, Peard Real Estate Group chief executive

How do you think the property market will perform this spring?
Given the historically low interest rates, housing affordability and a positive outlook on the local economy due to expected increased mining activity and job growth, there is every possibility that we will see the market turn as we move towards the end of 2018.

When homebuyers recognise that prices have stabilised and that there will never be a better time to buy, demand will increase and we will move back into a period of growth.

We are already seeing increased demand from eastern states investors who recognise WA now offers superior growth opportunities to the east coast.

As the Sydney and Melbourne markets wind down, Perth is one of those markets property investors can turn to for not only affordable property, but prospects of growth moving forward.

Are there any areas of the market you think will be particularly active?
The Peard Real Estate Group has found a strong improvement in property sales in the premium end of the market, especially homes priced above $1 million.

Upgraders understand that higher-priced homes are now selling for below replacement cost in many areas of Perth.

Similarly, first-home buyers understand that homes in coastal locations represent excellent value for money compared to building a new home further inland.

Perth’s northern suburbs are dominating the list of property ‘hotspots’ and I think we will see some strong figures to come from suburbs such as Doubleview, where strong demand and good value continue to drive sales growth in the area.

Can we expect prices to rise?
I think it is safe to say that when the price growth does return, it will be slow and steady, which is generally much better for a sustainable market.

John Percudani, Realmark director

How do you think the property market will perform this spring?
Perth has been in a cycle of low transaction volumes for some time.

As demand continues to build, and with new homes entering the market over the coming months, we expect to see a seasonal increase in buyer activity.

Are there any areas of the market you think will be particularly active?
We have noticed traditional suburbs such as Leederville and City Beach remain high on the demand side, with low days on market.

Suburbs with good transport links and in school catchment areas remain high on the list of demand.

Can we expect prices to rise?
We expect any price adjustment of the coming months to be moderate, as the market continues to be in a healthy and balanced supply-to-demand cycle.

Mark Whiteman, Ray White WA chief executive

How do you think the property market will perform this spring?
We see the market building into a strong spring/summer period with a lift in transaction numbers which we anticipate being followed by a lift in sales prices into 2019.

We are extremely positive about the future.

Are there any areas of the market you think will be particularly active?
Scarborough, Burswood, South Perth and the Perth CBD have significant infrastructure projects that through increased amenity will provide considerable shifts in desirability, plenty of new development will also provide plenty of opportunity for buyers and we predict plenty of activity.

Can we expect prices to rise?
Transactions will lift first, through the back half of 2018, with price rises starting to be seen in 2019.