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The Home Front V2 - WA's Property Boom or Bust?
04/07/2008 - By Rikki Patterson Western Australian Property Boom or Bust?
Western Australian Property Boom or Bust?
Western Australian Property Boom - 2 Years on and the growing housing shortages
It was two years ago now, when we were well and truly in the middle of our property boom, that BIS Shrapnel director Robert Mellor said, “The only variable able to put a halt to spiralling property prices is housing affordability.”
Back then; Mr Mellor reported that the national residential market was suffering its worst affordability crisis since the late 1980s. His prediction was that Perth’s house price growth would slow to 3 per cent in the next financial year.
Mr Mellor almost got it right. Instead of 3 per cent last year, Perth experienced an increase of around 9 per cent. Perhaps he was simply a year ahead of his time; recent predictions from BIS Shrapnel suggest an increase this year of 2 per cent.
This might not seem significant to most, however let’s keep things in perspective; if you owned or bought a home in 2001, and you still own it, you have experienced an equity gain of 178 per cent.
Furthermore, what we need to understand is that although growth has slowed, in most cases prices have not gone backwards. Now compare that with the share market, which has fallen around 11 per cent since the beginning of the year!
Underpinning the Perth market, RP Data national research director Tim Lawless said that Australia was experiencing its highest population growth in almost 20 years. Nationally, we experienced growth of 1.6 per cent or 300,000 new residents last year with Western Australia topping the chart with an increase of 2.4 per cent.
All these people have to live somewhere. A growing housing shortage will keep demand strong. As a result, expect rents to keep climbing. In fact, Paul Bennion, Managing Director of DEPPRO said that gross rental yields jumped 16 per cent during the year ending the March quarter 2008.
If you’re an investor, the figures produced by Australian Property Monitors also show that there has been a major improvement in rental yields for Perth apartments, which increased by 10 per cent during the same period.
If you’re renting, it might be good time to buy. The average cost of renting is set to rise much more than the cost of buying in 2009 and 2010, due to the undersupply of new housing.
If you think the time is right to enter the market, I would love to assist you with my wide range of specialised services. Or, if you are settled comfortably, but would be interested in knowing exactly what your home is worth in this time of transition, please call to receive your very own premium property report.
With warm winter greetings,
Rikki Patterson
Phone: 08 6454 6200
Sales Consultant Fax: 08 9356 7000
Mobile: 0431 899 615
Email: rikki@targetrealty.com.au
