Solid growth predicted for Perth’s property market: Q&A with the pro’s

Girl happy to see climb
AFTER years of declines, property analysts are predicting a return to price growth for Perth in 2020.

CoreLogic head of research Tim Lawless expects Perth to record 6 per cent growth, with Reiwa president Damian Collins forecasting 3-4 per cent over the year.

The top end of the market was expected to see the best results, with 6-7 percent growth predicted by Mr Collins and 10-15 percent by forecasting analyst Gavin Hegney.

Residential asked four experienced western suburbs agents about their expectations for the local market in the year ahead.

Bev Heymans, Acton Cottesloe and Dalkeith director

Bev Heymans, Acton Cottesloe and Dalkeith director

What do you expect to happen with prices in the western suburbs?

I feel confident that we will see slow but steady improvement in prices. This is already reflected in recent sales.

What areas are likely to be the stand-out performers?

I feel that properties that have water views, ocean or river, will see the greatest jump in prices. The low stock levels are making it increasingly difficult for buyers looking for this type of property. Also properties that are already tenanted are attractive to investors as they have a guaranteed income stream.

What sort of buyers do you expect to be most active?

I am getting inquiries from all types of buyers. Investors are coming back strongly as they see the market as having bottomed and the rental yield is far better than bank interest. Rents are increasing, something that tenants haven’t experienced for years, and they are also now deciding to buy rather than rent.

What could derail any expected growth?

I think the only factor that could have a material negative impact on prices would be if suddenly the market was swamped with new stock. Based on the conversations I am having I don’t feel this will happen. In fact, as agents we are all struggling to get enough property to meet our buyer demands.

What changes do you expect to see in the western suburbs property market over the year?

The development sites are obviously attracting lots of attention and I feel that we will start to see some exciting new projects.

Enzo Pagnozzi, Growth Realty principal

Enzo Pagnozzi, Growth Realty principal
WA has experienced a very difficult market for the past 10 years with negative or no growth. However, there is a general feeling that the market is slowly improving. When we see eastern states investors coming to WA looking for real estate opportunities, it is a positive sign. I believe we will see more confidence back in the real estate market in 2020.

What do you expect to happen with prices in the western suburbs?

The general feeling is that property prices have bottomed and will remain steady. I have had several buyers from the eastern states casing out the Perth market looking for opportunities as they see this as an ideal time to buy property in WA.

Will growth be steady or rapid?

Whatever growth there will be this year will be modest. I believe that any rapid growth is still some time away.

What areas are likely to be the stand out performers?

Our office is in the Subiaco precinct, which is an area that always attracts strong buyer interest due to the substantial infrastructure available. These include schooling, medical facilities, food and beverage and entertainment. It is also becoming a major business area with many new businesses moving into the area.

What sort of buyers do you expect to be most active and why?

The sector which attracts most buyers is the owner-occupiers looking mainly for the character homes ranging from the one to be renovated to the fully renovated homes and the new contemporary styles. There are many families looking to trade up to a larger home as well as those looking to downsize. We are also starting to see first-home buyers looking for apartments as these represent excellent value at the moment. The Subiaco precinct attracts buyers for many types of properties.

The major factor that will boost local market activity is, in my opinion, confidence. This should mainly come from government infrastructure spending.

What could derail any expected growth?

There are many things which could derail expected growth. The potential crisis escalating in the Middle East will surely have a detrimental effect should it worsen. Australia as a whole seems to be faring quite well, it’s just unfortunate that WA has been left behind while the eastern states have surged forward.

What changes do you expect to see in the western suburbs over the year?

With the rezoning of certain areas, there will be more infill. That’s a fact. When this will occur will depend on the market confidence. It would have to be a very brave or financially strong developer to risk building in the current market. However, as these large projects take time to be built, there are those that will take the risk that the market will improve by the time these projects are finished. There is the old adage “buy in gloom and sell in boom”.

Vivien Yap, Ray White Dalkeith-Claremont principal

Vivien Yap, Ray White Dalkeith-Claremont principal
I am optimistic about the market, it is a good time to buy.

What do you expect to happen with prices in the western suburbs?

With buyer interest improving and the shortage of properties available to choose from, prices should stabilise and then start to improve.

Will growth be steady or rapid?

Steady.

What areas are likely to be the stand-out performers?

Wembley, because of affordability for what you can get, the average prices are between $750,000 – $1.2 million and there is a bigger buyer pool for this price range. Location is ideal as it’s close to Perth CBD and the beach. There is a large choice of homes and townhouses attracting renovators and families.

What sort of buyers do you expect to be most active?

Second and third-home buyers are most active, the market is a good time to buy and these buyers have been monitoring the market. Downsizers are also active too.

What factors will boost local market activity?

More improvement in the resources sectors will help; however it is not just one thing – various factors have to be considered. Of course, interest rate cuts will help but it will need to be more than one. In Subiaco and surrounds the injection of vibrancy in that area such as schools etc will see more activity.

What could derail any expected growth?

An unexpected election will do it. An interest rate rise will not be a negative, this proves the market is getting strong. Uncontrollable factors such as the bushfires will immediately impede growth, also oversupply of properties and days on market.

What changes do you expect to see in the western suburbs over the year?

Property close to the city and particularly the western suburbs is always highly sought after, so we will see more redevelopment (infill) to take advantage of the amenities and location. Renovating and capitalising on a property’s location will also continue to prove both popular and financially rewarding when it comes time to sell.

Richard Young, Caporn Young chief executive

Richard Young, Caporn Young chief executive
At Caporn Young we are very excited about the year and decade ahead of us. Last year was the toughest year in real estate I have experienced in the past 31 years. A return to modest capital growth and confidence in the market will have an exponential impact.

What do you expect to happen with prices in the western suburbs?

We have passed through the bottom of the market and 2020 will deliver, in my opinion, some long overdue capital growth. My prediction is in the 4-6 per cent range.

Will growth be steady or rapid?

There is some great value in the market at the moment with strong fundamentals so we could well see stock continue to tighten which will put pressure on prices. The next three months will be very interesting with good growth which may naturally steady over winter.

What areas are likely to be the stand-out performers?

Stand-out areas are those which have proximity to the ocean, river and proximity to schools and amenities in that order.

What sort of buyers do you expect to be most active?

Buyers who are selling and buying for lifestyle, who may have wanted to improve their properties in terms of size and/or location for a number of years however the exit and entry costs could not be rationalised in a market where prices are falling or at best flat-lining.

What factors will boost local market activity?

Consumer sentiment/confidence.

What could derail any expected growth?

Anything that will negatively affect consumer sentiment, either locally or on the world stage.

What changes do you expect to see in the western suburbs over the year?

Infill, apartments and renovation – generally investment in the property sector.

 

See below for the latest REIWA market snapshot:

 

Sales significantly up, and I felt it on the weekend with a HUGE increase in buyer activity and MULTIPLE offers!

If you have been holding off to sell for when the market tide turns then get in touch with Near Me Real Estate today! Now is the time to fish!!

– Sam Rettke, Near Me Real Estate Managing Director

 

Source:

https://www.communitynews.com.au/western-suburbs-weekly/real-estate/steady-growth-expected-for-western-suburbs-property-market/

https://reiwa.com.au/the-wa-market/perth-metro/