The prospect of even lower interest rates in 2015 is good news for real estate markets in Western Australia’s capital city, according to a national real estate group.
Angus Raine, CEO of Raine & Horne, said with the Perth market so heavily tied to the commodities sector, the Reserve Bank’s decisions throughout 2015 would underpin real estate activity in the city.
The real estate group said the city had put in a mixed performance for investors in 2014, and this would likely continue into the New Year.
According to Paul Curran, principal of Raine & Horne Rockingham Beach, suburbs in the south-west enjoyed a healthy 2014.
“Baldivis has been the star of the show in 2014, thanks to the $116 million redevelopment of the Stockland Baldivis shopping centre,” he said. “Since the Stockland Baldivis reopened four weeks ago, about 25 per cent of real estate sales in the City of Rockingham have occurred in Baldivis.
“It’s a classic example of the adage ‘build it and they will come’ and underlines how infrastructure improvements can underpin real estate values.”
Mr Curran said interest rate cuts would ultimately stimulate Perth’s south-western suburbs.
“Interest rate cuts will always make a difference in first home owner-belt suburbs such as Rockingham, Safety Bay, Baldivis and Warnbro, where it’s possible to secure a four-bedroom, two-bathroom house for between $380,000 and $450,000.”
In northern Perth, demand for properties has been affected by falling commodity prices and the mining slowdown, according to Larry Gallagher, principal of Raine & Horne North Perth.
Mr Gallagher said this could be set to turn around in the New Year.
"There is a cause for optimism, with the falling Australian dollar sure to help attract more foreign interest in the Perth real estate market.
“The falling dollar might also keep more Australians at home this Christmas holiday season, with WA sure to be the major beneficiary. A spike in tourism numbers often translates to more interstate investors buying Perth real estate.”
Mr Gallagher said in the New Year, Bayswater will be a popular real estate market.
“Bayswater is only minutes to the CBD and is well served with road and rail transport,” said Mr Gallagher.
“With entry-level two-bedroom apartments starting from $290,000 and 5 per cent gross yields, I expect that Bayswater will be in the sights of first-time buyers and investors in 2015.”