The selling market

by Administrator 24. January 2014 21:20

 

Current data from the Real Estate Institute of Western Australia show that sales turnover lifted during both October and November pushing Perth’s median house price to a new record.

 

The data show sales had returned to normal levels and indicate that for the three months to November Perth’s median house price climbed to around $530,000 - $535,000, up from the previous peak of $525,000 on the June quarter.

 

REIWA President David Airey said the main reason for the big rise in sales was that Perth was coming out of a big slump in turnover in the September quarter and had returned to more normal conditions.

 

“The quarterly median for the three months to November was up by almost 4 per cent and due mainly to the composition of sales during this period after strong first home buyer activity pulled the median house price down to $510,000 in the September quarter. 

 

“While first home buyer activity is still very evident, there was a solid increase in sales within a 10km radius of the CBD and a softening of activity in outer areas, particularly along the coastal sub-regions north and south of the city.

 

“This shift in sales composition towards more expensive properties selling pulled the median upwards,” Mr Airey said.  

 

The data also show that in some of the coastal sub regions, such as parts of Wanneroo, Joondalup and in Rockingham there was a weakening in sales activity that had emerged through the month of November.

 

“While this retraction is sales is only modest at around 2 to 3 per cent on the previous month, it is accompanied by a drop in listings also in these areas which suggests that the fall in sales activity has nothing to do with oversupply.

 

“It is more likely that first home activity in areas away from the coastal strip has been the focus of buyers in more recent times,” Mr Airey said.

 

The number of properties on the market continues to recover from below average levels over the last year to now reach its highest point for the year. REIWA data currently showing 8,656 dwellings and 1,199 land lots for sale.

 

Mr Airey said that the rental market continued to turn in favour of tenants, with the number of available rentals growing and median rents coming down once again.

 

“The median rent in the metropolitan area has dropped by just over 2 per cent over the last three months to $460 across the board. This now breaks down to typical rents for houses coming in at around $470 per week and for units and apartments at around $450 per week,” Mr Airey said.

 

Current REIWA data show rental listings lifted by 2 per this week alone, to 4,419 properties on the market while the vacancy remains above average at around 3.2 per cent. 

 

 

Market Feel

Traditionally property sales pickup as we go into February through to the beginning of April when it slows down a bit. Once the kids go back to school normally we start to see more potential buyers coming through home opens. Like many other agents we have only opened a few homes in January so whilst home numbers have been good we are yet to see any increase in home open numbers but what we are seeing along with many other agents is website enquiries increasing. Low interest rates are continuing to inspire buyers to act sooner rather than later and whilst rents have slowed property seems to be gaining more interest from investors as it might well be a safer place to invest than the share market at this time with shares having grown well in value during 2013

 

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Converting your family home to an investment

by Administrator 22. January 2014 23:03
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Is it better to buy then rent ??

by Administrator 13. January 2014 16:00

REIWA has reported recently that housing affordability has improved over the last year and that median rents have climbed by 12 per cent.

So, for many people renting a question they are asking themselves is, “Would we be better off to buy?”

Current data show the median purchase price for first home buyers is around $420,000 while metropolitan rents are around $470 per week.

Not everyone is in a position to borrow and meet loan repayments, but for those singles and couples who can afford around $580 a week at current variable interest rates, a mortgage of $373,000 will buy a very suitable unit, villa or house with its own land.

(In this example I am assuming a deposit of $20,000 and eligibility for the $7,000 First Home Owners Grant, so the purchase price would be $400,000. However, there are many cheaper properties throughout WA including the metropolitan area. Some house and land packages are accessible at $300,000 or less and fixed rates can be more affordable than variable rates).

In other words, by paying around $100 more each week on a mortgage as opposed to paying rent, many tenants could transition to home ownership if that suited them and banks approved the loan.

Naturally, the bigger the deposit the smaller the loan and it’s important to keep in mind that renters don’t pay council rates, annual utility charges, building insurance and maintenance which home owners do. Buyers need to factor in about $50 per week to cover this.

The real cost of renting is not the fortnightly payments, but the loss in savings compared to accumulating equity in a home.

There are also good financial reasons to support ownership, but two key factors illustrate its benefit.

First, home ownership can be a stepping stone to increased wealth and long term financial security. Property is highly regarded by financial institutions as security for borrowing to fund a property investment, a business venture or a holiday.

It’s more difficult to borrow against other assets.

Second, home ownership opens up lifestyle opportunities. With your own place you can design and mature the garden, paint and decorate as you wish, have pets (with some strata exceptions), and generally create a home with the liberty and security that can bring.

Households which experience financial difficulty in retirement years are more likely to be living in rental properties, so investing in a home can be a better way to secure your retirement circumstances.

The early decisions you make around real estate can affect your long term outlook, but it’s strongly advisable that you discuss your plans with competent financial advisers, banks and lenders before making a decision and then approaching an agent.

This article was originally published on reiwa.com.

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