Baby boomers are driving property sales in lower price properties as much as first home buyers. Figures show that baby boomers will play a key role in the WA real estate market in the years ahead. Figures from the Australian Bureau of Statistics show that almost a quarter (23 percent) of Western Australians will be aged 60 years and over by the year 2021, compared with 15 percent in 2001.
A trend of investors moving back into the property market in 2010 should occur because of rising rental returns and the view that lower priced homes have reached the bottom of the market. In addition, many investors are reluctant to invest in the stock market because of the international financial situation. Whilst rental yields have improved in some areas of Perth, investors are showing increasing interest in the Brisbane property market due to growth potential. According to figures recently released by the Australian Bureau of Statistics, Australia’s population has grown to 21,542,000, an increase of 389,000 people over the previous year. Queensland received by far the most people from net interstate migration gaining 22,700 people from the other states and territories.
The third analysis of Perth property market in days confirms house prices surged in last three months of 2009.
It might be the third different analysis of the Perth property market in a matter of days, but it agrees with the others on the key point – house prices surged in the last three months of 2009.
Data released by the Australian Bureau of Statistics today shows house prices rose 5.7 per cent in the December quarter, with an overall increase for 2009 of 11.5 per cent.
It was a game of two halves for Perth, with a sluggish first six months offset by a late turnaround. The December quarter increase was the second-highest of the major capitals, behind Melbourne, but the annual increase was the second lowest, topping only Brisbane.
The ABS figure is expressed as an index, rather than a price, but follows two separate analysis last week. Australian Property Monitors calculated the median price for houses rose 3.1 per cent for the quarter and 8.7 per cent for the year, while RP Data figures showed the median up 0.4 per cent for the quarter and 6.5 per cent for the year.
According to APM, unit prices rose 6.6 per cent and 15.8 per cent respectively, while RP Data’s figures showed increases of 0.8 per cent and 9.5 per cent.
Median house price: $482,500 – 4.42% fall in last 12 months.
Median unit price: $389,500 – 0.60% increase in last 12 months.
Perth was undeniably the star performer over the last 10 years, outshining all other cities with a remarkable average per annum growth of 12.29%. This was of course largely driven by the resources boom that peaked around the middle of this decade.
We know how real estate cycles work – what goes up must come down and Perth’s property markets have been in decline for awhile but this now seems to be turning around with some positive price growth in the last quarter – houses 1.47% and units 4.9%. Of course prior to the recent decline, house prices increased by as much as 90% the previous five years, so it was only natural that things had to come off the boil.
In fact, when you look at the overall picture for Perth, it’s really only those who bought at the end of the last property boom or over committed financially that will be suffering, whereas people who bought a little while ago are still enjoying good capital growth.
The big question a lot of investors are asking is whether it’s time to get back into the Perth housing market. My response to that would be no, not quite yet, because it looks like the local economy could be heading for a bit of a recession for the remainder of this year and possibly into next year. While the long-term prospects for Perth are good, with the resources sector starting to recover, I currently see better opportunities on the eastern seaboard.