Perth is a vibrant and modern city and is the capital of Western Australia.
Market Update – March quarter 2009*
Dec 08 – Mar 09
Mar 08 – Mar 09
|House Rent ( 3 b/r)||$370 pw||0.0||+5.7|
|Unit Rent ( 2 b/r )||$350 pw||0.0||+9.4|
* This is the most up to date available – property data is released 3 months after the end of each quarter.
Source: Real Estate Institute of Australia
It is now clear that Perth’s residential market has peaked after a spectacular run over recent years. Despite prices recovering slightly in the March quarter, median house and unit prices have declined by over 7% since the market peaked in the December quarter of 2007. It would not surprise us if Perth prices fell further having almost tripled in recent years. When some pundits make gross generalizations about falling house prices, Perth is really the market most vulnerable to that phenomenon. The upside is that rents are showing consistent growth. The downside is vacancy rates have started to edge up, which is no surprise after a sustained period of rising construction levels, which ran from 2001 through to the first quarter of 2007.
Yields on houses and units are at typical top of the upturn (low) levels. Not currently recommended for investment. First home buyers are said to be very active in the Perth property market, especially in the “up to $500,000 price range”. However, there appears to be very little activity in other areas of the Perth property investment market.
It is expected that Perth will not see much in the way of growth in the 12 months ahead. Consequently, property investors are more and more seeking opportunities on the other side of the country, especially Brisbane and Melbourne property. Its reported that due to rate cuts, properties are being taken off the market and rented out in preference to reducing selling price. This in turn is affecting the rental market as the number of houses available for rent increases.
Following Perth’s phenomenal growth over the last 10 years, the housing market is now quite subdued with buyers expected to remain on the sideline for most of 2010.