ACT reports progress of ‘Better Suburbs’
The ACT government has delivered an update on its “Better Suburbs” plan, detailing the headway that has been made to...
The Western Australian market is facing a downturn in activity.
As economic growth on the west coast softens, theproperty market has taken a hit. Over the past year, the city recorded capital growth of just 3.2 per cent, according to RP Data.
In addition, activity is dropping off as buyers lose confidence. RP Data shows dwelling sales fell by 1.3 per cent in the past year, a period when most other capitals recorded increases. REIWA figures show sales turnover fell by seven per cent in the September quarter compared to June, and by 15 per cent compared to September last year.
A report from the Residential Development Council suggests Perth prices are still three per cent above the previous high point. However, it went on to warn that growth may have reached its peak and is likely to begin softening in coming months.
The Perth median price nudged upwards by one per cent in the September quarter, according to the REIWA. This result may indicate a shift away from the cheap outer suburbs towards blue-chip property transactions, REIWA president David Airey suggests.
Sales of homes in the premium sector are climbing, the REIWA reports. Properties in the $1 million to $2 million range accounted for 6.7 per cent of sales in 2013, but now account for 8.2 per cent of all sales. Six new suburbs of Perth achieved million-dollar sales in the past year, including Ellenbrook, , North Lake, Piara Waters, Pickering Brook and Wandi.
A report by Herron Todd White highlights some of the city’s most appealing suburbs for investors. Ferndale was described as a market on the rise, with properties regularly selling above their asking price. In the Wellard Land Estate, meanwhile, asking prices have leapt dramatically at every stage of the new land release.
Travel 15 kilometres south west from Perth’s CBD and you will find yourself in the cosmopolitan suburb of Fremantle.
This charming port city draws people from all walks of life, both to visit and to live in the bustling city. Fremantle’s attractions lie in the café strip that hosts a wide range of restaurants and bars, and the heritage precinct and activity facilities that cluster around the harbour.
The leisurely lifestyle is reflected by the many older-style homes that comprise the suburb’s housing stock. Properties range from Federation style to worker’s cottages, converted warehouses to modern builds, and apartments designed to reflect the area’s artistic sensibilities.
Fremantle has a wide appeal, hence its popularity and impressive price growth. Now is possibly one of the best times of the year to buy in Fremantle, as the market has slowed recently.
Like many suburbs at the higher end of the property market, Fremantle has underperformed in recent years, and in recent months the median price has dipped. However, the attractiveness of the suburb continues to draw both homebuyers and tenants. Local agents have reported seeing an increase in enquiries as the weather improves and the median price is now holding steady.
At a median price of $780,000, Fremantle is on the expensive side for the average investor. However, the suburb is ideal for those with some extra capital and a willingness to spend time finding the right property.
Most investors would do well with one of the older, charming period homes which could be refurbished and held for long-term capital growth. Proper due diligence and a clear investment strategy are critical, as an investor must be willing to accept a low rental yield. I would also advise them to ensure that the property is structurally sound so that repair costs are kept to a minimum.
Investors with slightly lower budgets or who prefer a higher rental yield may achieve their goals by investing in one of the modern-style apartments which have been springing up in the port city. However, as with all apartments, the higher yield comes at the cost of land value, possibly limiting capital growth in the long term.
Fremantle, like the entire Perth metropolitan area, had a great start to 2014 but tapered off in the second half of the year. As buyers who have held back during the winter months return to the market, those with the capacity and willingness to invest will find that Fremantle is a great place to start.
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