The latest report on the north west property market makes grim reading for people who bought properties in the area over the past few years expecting the resources boom to continue for many years.
Blogger: Daniel McQuillan, principal partner, Investwise
As predicted by many astute property investors, the property bubble in the north west has effectively burst – a fact underlined by the latest report by the Pilbara Development Commission.
Figures for the March 2014 quarter show a continued slide in both rents and capital values in all of major population centres in Pilbara.
Highlights of the report show for example:
• In all three major towns, the average advertised residential weekly rental cost and advertised residential purchase prices dropped for the second consecutive quarter
• Port Hedland’s average advertised rental prices dropped for a sixth consecutive quarter from an all-time high of $2,544 per week during the September 2012 quarter to a five-year low of $1,462 per week in the latest quarter
• For the sixth consecutive quarter the average advertised ‘for sale’ price of properties in Port and South Hedland dropped
• Port Hedland’s average advertised ‘for sale’ price of $972,747 in the latest quarter is at its lowest since the September 2009 figures
• South Hedland’s March 2014 average advertised ‘for sale’ price of $764,397 is the lowest it’s been since the December 2009 quarter
• Karratha’s average advertised weekly rental has dropped for the tenth consecutive quarter, down from $1,784 in the September 2011 quarter to $940 in the latest quarter, which is the lowest since figures have been collected by the commission. The 452 properties advertised for rent during this quarter are also the second highest on record
• The 322 advertised residential properties ‘for sale’ in Karratha is the highest number since figures have been collected by the commission, peaking from a low of 108 properties just six months ago
• The average advertised ‘for sale’ price in Karratha is at its lowest since the June 2007 quarter
• In Newman, the 155 residential properties advertised ‘for rent’ during the last quarter in Newman was the highest number since figures have been collected by the commission; whilst the average advertised rental price of $1,456 per week is the lowest since the December 2010 quarter. The average price of a home settled in Newman fell from $857,083 during the June 2013 quarter to $690,000 during the March 2014 quarter
The property bubble in the north west during the past five years could be regarded as one of the largest in the history of Western Australia as it mirrored the boom in the resources sector, which is gradually petering out.
This boom sucked in many investors throughout the state to the detriment of the Perth market which has remained fairly steady over the last five years.
However, with the rapid decline of the north west property market, we are now seeing increasing activity in the Perth market as investors seek security and steady returns.
The Perth market, especially in selected coastal areas still offer investor great investment opportunities.
Over the next year, areas in the greater Perth area that are relatively undervalued, such as the coastal strip between Fremantle and Mandurah, should see a surge in activity by investors and this will put an upward pressure on property prices.
About Daniel McQuillan
Daniel McQuillan has held senior positions in the property and financial services sector for over a decade. During that time he has gained professional qualifications and a wealth of experience that has enabled him to personally build a very successful property portfolio based on a targeted plan. In 2011, he established Investwise so he could utilise these skills to help other people create wealth through similarly devising a personal investment model that best suited their personal circumstances. As a result of this targeted and personal approach to property investment, Investwise is now one of the fastest growing property investment advisory services in Western Australia.
Further information can be found at www.investwise.net.au
About the Blogger
Lachlan Walker is head of the Place Advisory division at Place Projects, Brisbane’s premiere project marketing company. Lachlan is recognised as one of Queensland’s preeminent residential property market experts, specialising in South East Queensland residential property.
His role is to provide product specific advice to clients by gathering and applying internal and external market intelligence which is translated into meaningful market reports. He is widely published and is continually called upon to provide commentary on the residential market by various media and property journalists nationally.
Lachlan has extensive experience in property market research and has provided professional consultancy and advisory services to leading property clients including the likes of Leighton Properties, Lend Lease, Watpac, FKP, Brisbane Housing Company and Consolidated Properties.
Visit www.placeprojects.com.au for more information.