Signs of revival in South West property market

Stock image.
Stock image.

REIWA councillor Joe White is seeing a resurgence in parts of the South West market.

The Dunsborough resident said in the past 12 months, six old cottages within a 150m radius of his home had been demolished and redeveloped or were in the process of redevelopment.

“I have never seen this in my life, so it marks a tipping point in both who is building these houses and also the recognition that the old houses have reached their use-by date,” he said.

“The owners are all building to live there, or a view to living there at least part-time once they have retired.

“The demographic therefore is either retirees wanting to be close to town and beach or people in the 55 to 65 pre-retirement, but in the retirement planning stage of their lives.”

Yallingup’s housing market has surged ahead on the back of permanent residents wanting to settle.

Mr White said it was telling that there were no dedicated holiday home builders in the mix.

“This is further reflected in Eagle Bay and Yallingup where in the pre-GFC era these villages were level pegged, but Yallingup has surged ahead on the back of permanent residents wanting to settle there, whereas at Eagle Bay the same story has not manifested, and being a holiday home location where it’s not an essential item, the market has languished,” he said.

Bunbury was another source of optimism.

“Bunbury represents a buying opportunity that has left agents and valuers with dropped jaws,” Mr White said.

“When the valuers start to buy, you know it’s good value.”

Joe White.

Mr White said while turnover in the property market statewide was the lowest it had been since 1990-91, when the population was significantly lower, it was easy to feel depressed, but the fundamentals of a recovery were there, including:

1.Vacancy rates in permanent residential properties have dropped significantly and steadily. More demand for rentals doesn’t necessarily mean there is an inflow of people into the state, but it probably does say that the outflow has stopped.

2.If people are knocking down 50-year-old cottages and rebuilding significant homes, even though there is no property transfer to point at, there is an increase in the housing supply as the old cottages were at best temporary holiday accommodation only.

3.Locally, the FIFO workforce is buoyant again, however the skill set is changing. IT experts on driverless trucks and the like are FIFO jobs not typically seen in the past.

4.The towns are still growing, so even if prices are not rising, the population is. Dunsborough, Busselton and the Greater Bunbury region are planning for continued growth.

 

 

Locals love the lifestyle of the South West.

5.Housing in WA is quite possibly at its most affordable level for 30 years and when you consider the influences on sentiment keeping people cautious, you realise that it is only sentiment holding a recovery back as the fundamentals of a strong economy are in very good shape.

6.While the eastern states has gone into a slump, WA has been in one since 2014 and is due to come out of the dark tunnel they are currently entering. There’s nothing new about WA being counter-cyclical to the rest of the country.

7.The policy settings on monetary policy will be dictated by the needs of Melbourne and Sydney, so an interest rate drop will have a bigger effect here than over there because we’re ready to boom, not dying down.

8.A Federal Election where negative gearing is an issue fuels nervousness and a Federal Budget showing a surplus shows a recovery in our tax base. Business loves to see governments balance their books as well, because if they don’t, all it says is “not yet” for tax hikes.

RELATED: Election uncertainty affects Perth market

9.The State Budget deficit is under control – more good news.

Mr White said in the short-term the market was frustrating, but he is a medium-term optimist.

“Let’s not forget that these things go in cycles,” he said.

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