THE worst is over for the Perth property market according to local experts.
From established homes to new builds, apartments and rentals, they shared their predictions for 2018, with one saying this year was shaping up to be one of the most positive in recent times.
Overall they expect sales of established homes to increase on 2017 levels, listings to decrease and price stability rather than growth is forecast.
However an upswing in prices is likely in under-supplied suburbs.
Increasing demand is likely to be met with a shortage of supply in the new apartment market, while greener living and energy efficiency are emerging trends in new homes along with dual entry, catering for the growth in multi-generational living.
For first-home buyers in particular, hot spots include the rapidly growing outer metropolitan corridors in Perth’s north-east, east and south, and the expansion of road and rail networks is expected to generate new, affordable lifestyle opportunities.
For people looking for a beachside lifestyle, there is still good value to be found along the coast.
Whatever your budget, one tip is to always look for real value: you want to be close to shops, schools, transport links and employment to maximise your investment in the long term.
This year is also expected to be more positive for investors; gradual improvements are forecast for the rental market with the number of listings and the vacancy rate set to decrease and while rents may not rise, they are not expected to fall either.
Read the experts full predictions below.
Hayden Groves, REIWA president
OFF the back of the stabilising conditions of 2017, we expect market conditions to moderately and steadily improve throughout 2018, although REIWA cautions against expectations of rapid growth in rents or prices next year.
In the established housing market, sales volumes started to stabilise during the June and September quarters.
Last year, there was an average of 489 property sales recorded each week.
REIWA forecasts there will be about 500 sales per week during the next six months.
If sales volumes continue to trend at current levels, Perth’s median house price should also stabilise in 2018.
With new dwelling activity set to decline in 2018, REIWA forecasts the number of properties for sale in Perth to remain at current levels over the year, a level commensurate with market parity.
Listings for rent declined significantly during 2017, reducing from 11,000 in January to just over 9300 by December.
Over this same time, leasing activity levels were strong, with about 1180 rentals leased each week.
If this trend continues, the balance between supply and demand of stock will continue to improve in 2018.
Perth’s median rent price has remained at $350 per week since last April.
REIWA expects no significant changes to median rent prices across the metro area in 2018 but we don’t expect to see rents fall either.
Paul Blackburne, Blackburne managing director
2018 is almost certainly the beginning of the recovery of the Perth property market.
I think the growth will only be moderate, at around 4 per cent per year for the next few years.
In Perth, there have been very few new apartment projects starting construction in the past year and this will lead to a significant shortage of supply in 2018 and 2019.
When there is a supply shortage, we usually see increases in price, however I expect these to be moderate gains due to the limited wage growth in WA.
We see the best growth areas being:
– East Perth due to the footbridge connecting to the new stadium and Burswood being completed.
– Karrinyup, where there is a shortage of supply of high-end yet affordable apartments and the Karrinyup Shopping Centre is going through a $600 million redevelopment.
– Claremont, where there is limited supply and a huge demand from downsizers wanting large apartments.
– Rockingham foreshore, where prices are very low and the area seems undervalued given the abundance of new cafes, restaurants and bars along the north-facing beachfront.
– Ascot Waters, where the marina is going through major redevelopments and there is almost no supply of high-end, waterfront apartments for people wanting to stay in the eastern suburbs.
Dean Mudford, LandCorp acting chief executive
WA has come of age with new and emerging accommodation options available in a market which has reportedly bottomed.
Low interest rates, combined with realistically priced new and established housing, have lifted market confidence, especially among first-home buyers.
Buyers are seeing an opportunity to get a foot on the property ladder as values start to climb, albeit slowly, and the development industry works harder to offer value for money in what has become a very competitive environment.
Lifestyle choices will continue to reflect a changing and diverse purchaser profile.
Homemakers are seeking to live in communities that offer a range of price points and good integration with transport, amenity and services.
Precinct scale development within existing suburbs will create a range of housing opportunities for buyers to become part of an already established community enhanced by improved shared spaces and innovatively designed parklands.
Research tells us apartments have established themselves as a legitimate option for more and more buyers as they move towards a lock-up-and-leave lifestyle.
Our love affair with suburbs with good access to the coast will continue and the expansion of our road and rail networks will generate new, affordable lifestyle opportunities.
Tony Harvie, Summit Homes Group new homes general manager
HOME ownership has long been the great Australian dream and those who build in 2018 will be the big winners in Perth’s current housing market.
Land has never been more affordable and there are excellent buyer incentives from builders and developers, making now a perfect time to build.
Block sizes are changing so builders need to remain nimble and respond with a suite of designs that hit the mark in terms of affordability and functionality.
The trend to two-storey living is increasing with block sizes decreasing and it is a smart option from a design point of view to go up.
This means you still have the large functional family home and still space for a backyard.
Finally, the trend to multi-generational living cannot be ignored.
Children are staying at home longer and elderly parents are returning to the home so it is important to design homes that cater for all members of the family.
I think 2018 will be much the same as last year, with the key focus population growth in WA and affordability.
We believe we have almost hit the bottom of the cycle, meaning the next 12 months is a great time to buy in WA.
Paul Blakeley, Harcourts WA chief executive
OVER the past couple of years, we have seen dwelling values across Perth continue to fall on the back of the largest housing boom we have ever seen.
The good news is that we have been through the worst of it; all indications are we have reached the bottom of the market.
There has been a stabilisation of housing values across the Perth metro region and rental values have also improved, particularly in the past few months.
We have seen an increase in leasing activity and a decline in the number of listings for rent.
All are positive signs for an improved market.
Add to that more positive commentary in the press on the improving mining sector and the level of new construction and infrastructure gazetted in and around Perth, we can expect further stability and perhaps even small growth in 2018.
Confidence in employment is a key factor; people are less likely to invest in a large financial transaction such as buying a house unless they have a certain level of job stability.
So now is the time to buy. You will be hard pressed to find a better time to invest in housing; prices have stabilised, interest rates are low and job confidence is returning.
If you have been holding out, waiting for the bottom of the market, you may have already missed it.
But don’t fear, the rate of any increase throughout 2018 will be gradual.
Rental values are also expected to stabilise, so lock in your lease agreements now.
Brendan Gore, Peet Ltd managing director and chief executive
I BELIEVE property market conditions in WA will continue to favour buyers in 2018, with home prices expected to remain stable.
The rate of new home building and residential development is also expected to continue at present levels, with some scope for a mild increase and improvement.
First-home buyers in particular will continue to benefit from the range of government and market incentives for new builds as well as a much greater choice in housing options.
The challenging and sustained WA property market conditions over recent years has driven industry innovation and we have seen the creation of a new generation of highly appealing medium and high-density housing products.
These include terraces and apartments, designed to meet the needs of changing lifestyles and the growing demand for affordability.
In terms of location, there is great value to be found across Perth in both land and newly-completed homes.
Hot spots include the rapidly growing outer metropolitan corridors in Perth’s north-east, east and south, particularly for first-home buyers.
For people looking for a beachside lifestyle, there is great value to be had in some prime coastal locations, with extremely well priced land and house-and-land packages available in Perth’s new coastal communities from Yanchep to Mandurah.
Peter Peard, Peard Real Estate Group chief executive
2018 is shaping up to be one of the most positive years for the Perth real estate market in recent times.
Rental vacancies, which are a lead indicator for the direction of the property market, started to fall during 2017, which points towards recovery.
At the same time, the number of properties listed for sale in Perth started to stabilise during the past year and towards the end of 2017 they started to fall.
The key drivers for the recovery in the property market have been improving economic conditions and a major slowdown in new housing construction.
Improving economic conditions are giving people greater confidence to buy a property while the slowdown in new housing construction has meant the major oversupply in housing caused by the building boom between 2012 and 2016 is being absorbed by the market.
Suburbs that should most benefit from the continued recovery in the property market during 2018 will be those areas in high demand from buyers where there is currently limited supply.
During 2018, I would expect to see an upswing in property prices in undersupplied suburbs while the overall market should remain steady with no further price drops that have occurred over the past three years.
The rental market should also begin to recover based on a further decline in the number of properties listed for rent.
While rents overall may not increase during 2018, the huge discounting in rental prices that landlords have had to endure over recent years should come to an end.
Nigel Satterley, Satterley Property Group chief executive
WE are heading towards reaching the bottom of the residential market, so there really is no better time to buy and great value on offer.
There has certainly been some very tough years but latest data is showing that it won’t be long until the worst is behind us.
There are some positive signs of very early market recovery coming from the middle established housing market in suburbs such as Floreat and City Beach ($1-$2 million), which are holding their values and selling faster.
I am confident that in time this will have a flow-on effect to the rest of the metropolitan property market and add some buoyancy.
The number one tip that I always tell people is to look for real value.
Cheapest isn’t necessarily best – you want to be close to shops, schools, transport links and employment to maximise your investment in the long term.
After all, the family home is the largest investment most people will make in their lifetime.
1. Coastal: Kallaroo, Iluka and Padbury.
2. Close to Perth CBD and still affordable: Joondanna and Tuart Hill.
3. Well-established suburbs close to employment and amenities: Hamilton Hill and Willagee.
4. New housing in high-growth areas: Harrisdale and Piara Waters.
John Percudani, Realmark managing director
PERTH property values have been in decline or flat for the past five years, but in the past two months prices haven’t declined which signals the market is moderating.
While the rental market remains challenged, vacancy rates are starting to slowly fall off a record high supply of stock.
Rental values will remain contained into 2018 in comparison to previous record levels, and will be further limited by first-home buyers purchasing more affordable new homes with attractive land, build and finance packages.
Sale price movements are expected to be minimal and moderate in the medium term, but a healthier, more active market is expected during 2018, leading to more positive conditions in 2019.
Sales activity will continue to improve in the metro area and some regional markets such as Bunbury and the South-West region due to lifestyle and employment options.
Special lifestyle properties in Mandurah will present good value for ready-to-act buyers.
Markets to watch may include the Swan eastern corridor, the coastal Cottesloe-Claremont precinct, the Ardross-Melville area south of the river, and northern coastal suburbs such as Hillarys and Duncraig.
Over the past quarter, most of these locations have had positive price growth, and over the longer five-year cycle they have been better price performers than other metro localities.
Allison Hailes, UDIA WA chief executive
WITH 2017 a year of stabilisation for the property market here, I expect 2018 will be a year of moderate growth.
New construction activity, along with declining levels of stock on the market, provides strong evidence that we are headed into a market recovery phase.
UDIA’s latest data reflects increased confidence in the market from the development sector, with lots under construction for release in the next six months up nearly 10 per cent.
This positive sentiment is reinforced by recent increases in building and finance approvals and the fact that consumer confidence is currently at a three-year high.
The latest Housing Industry Forecasting Group report also predicts an upward trend in new dwelling commencements over the next couple of years.
In terms of areas to watch in 2018, the state government’s roll-out of MetroNet will stimulate growth in areas near the first new stations at Yanchep and Thornlie.
Areas such as Scarborough, Fremantle and Subiaco, which are undergoing major rejuvenation, also pose good investment potential moving forward.
Pricewise, areas such as Baldivis in the south, Alkimos in the north and Ellenbrook in the north-east corridor will continue to provide excellent value for money.
Jason Robertson, Master Builders Association housing director
2018 promises to be another exciting year in the residential sector.
We are seeing several emerging trends that are likely to increase this year including design in greener living and energy efficiency.
Using sustainable design with high-quality products has minimal environmental impact and is cost saving.
Dual entry homes are a continuing trend, particularly with adaptable housing and future proofing for family members.
Dual occupancy has been gaining momentum, along with granny flats and ancillary accommodation.
There is also an increased interest in terrace-style housing and micro lot developments.
Being a focal hub of the home, larger kitchens, similar to typical American kitchens, are in demand with interactive spaces popular spots for homework and family interaction to take place.
Seamless indoor-outdoor connectivity goes along with another trend for dual functioning spaces.
Think roof gardens and living walls, solar courtyards and outdoor areas performing as lounge rooms.
We are integrating even more smart technology into living spaces such as voice-controlled heating systems, high-tech security systems and increased customer demand for solar PV systems in new dwellings.
The increased interest in expandable back-up battery systems is rapidly becoming another must-have.
Travis Coleman, Acton chief executive
AT Acton, we are cautiously optimistic about the property market in 2018.
The final quarter for 2017 saw a shift in buyer sentiment and stock levels are down significantly in sought-after suburbs.
Our agents and property managers are reporting an increase in the number or people attending home opens and vacancy rates have finally started to come down.
There seems to be a general positive sentiment about the market, which is a good indication of the direction we’re headed.
If you have been waiting for prices to drop further, I suggest you wait no longer.
In the western suburbs, stock levels are down by as much as 70 per cent in some suburbs.
There is a shortage in Nedlands, Cottesloe, Floreat and Claremont, which means increased competition among buyers.
We are also experiencing record levels of “off-market” transactions, utilising a database of warehoused buyers eager to enter the market.