The Perth property market rose during the mining boom; then it dropped when mining subsided. Now many property investors in Perth are suggesting that the market is nearing its bottom and is about to turn. This means it could now be the perfect time to invest in Perth, and with the First Home Owners Grant being increased in WA by $5,000 in January 2017, it could also mean that first home buyers may be able to find an affordable property to call home. Let’s look at the data.
Over the last 12-months, the Perth housing market has fluctuated considerably in value. According to CoreLogic data, Perth property has experienced both gains and losses. But, while this market has been volatile, it is gradually stabilising. Property prices have also dropped by $29,000.
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Median Dwelling Values
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Source: CoreLogic RP Data
Experts are suggesting Perth will take another 6 to 12-months to plateau before the market starts rising again. These same experts also predict that at the same time consumer confidence will begin returning to the market. With the state elections now finished, Perth should start to witness a change.
On the economic front, Perth has suffered a downturn due to mining with a high level of unemployment. However, Perth and Western Australia, as a state, look set to prosper. Firstly, tourism across the state is strong with an increase in jobs in this sector and growth in infrastructure. Secondly, the Western Australian government aims to increase the state’s tourism income to $12 billion over the next 3-years, especially in the Asia-Pacific region.
Singapore, Malaysia and Indonesia are vital markets to Western Australia contributing over $484 Million to the state’s economy. This capital injection is a result of some 231,000 visitors flocking to the region from these countries during 2016. Also, while mining has shrunk in the state, it’s still continuing. Although, this is at far more sustainable levels than previously.
Perth is a vibrant city with a modern look and feel, growing infrastructure and good public transport. It also has some of the best schools, universities and world-class restaurants and beaches. Therefore, as an investor, it’s important to consider all of these aspects, before buying.
Property experts suggest before purchasing Perth property, it’s important to do thorough research on property types and areas. Focus your attention on areas that have an increasing demand or water views, and are within close proximity of the city. Other drawcards are areas with a low land supply.
First home buyers need to look into the First Home Owners Grant and think about buying in areas that are close to public transport, shops and schools, as well as employment.
Overall, location is the key to sound Perth investment. Ideally, situated property will achieve strong capital growth over the coming 10-years. Before buying seek out independent advice and consult a mortgage broker. This approach will ensure you make a sound investment decisions and get the best value.