Property market update: Perth, April 2018

<h2>House and unit prices</h2> <p>Median house prices across Australia have declined over the quarter, with the national median house price falling by 1.2 per cent to $809,201, according to the Domain March Quarter 2018 House Price Report.</p> <p><span class='b-autolinkshadowbox'>Perth<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/tas/7300/perth>Perth, TAS</a> <a href=https://www.smartpropertyinvestment.com.au/data/wa/6000/perth>Perth, WA</a></span></span>, in particular, saw a 2.0 per cent decline in house prices.</p> <p>Unit prices in capital cities have also declined over the quarter by 0.9 per cent to a median of $555,574.</p> <p>Of all the markets across the country, only <a href=https://www.smartpropertyinvestment.com.au/data/vic/3000/melbourne>Melbourne</a> experienced growth in unit prices and only <a href=https://www.smartpropertyinvestment.com.au/data/sa/5000/adelaide>Adelaide</a> remained flat. The rest, including Perth, saw a considerable decline.</p><div class="dfp-ticker interscroller f" data-catid="85" data-pcount1="20"><div class="interscroller"> <div class="interscroller__wrapper"> <div class="interscrollHeader interscrollHeader_top"> <div class="interscrollHeader__wrapper"> Advertisement </div> </div> <div class="interscrollerAd"> <div class="interscrollerAd__wrapper"> <div class="interscrollerAd__wrapper__content" id="div-gpt-ad-1605589917516-0" > <script> googletag.cmd.push(function () { googletag.display('div-gpt-ad-1605589917516-0'); }); </script> </div> </div> </div> <div class="interscrollHeader interscrollHeader_bot"> <div class="interscrollHeader__wrapper"> Advertisement </div> </div> </div> </div> <style> .interscroller{margin:15px -15px}@media (min-width:992px){.interscroller{display:none}}.interscrollHeader{width:100%;background:#333}.interscrollHeader__wrapper{line-height:20px;color:#FFF;text-align:center}.interscrollerAd{height:100vh;overflow:hidden;width:100%;position:absolute;clip:rect(auto,auto,auto,auto);left:0}.interscrollerAd__wrapper__content{display:inline-block}.interscrollerAd__wrapper{position:fixed;top:80px;overflow:hidden;-webkit-transform:translateX(-50%);-ms-transform:translateX(-50%);transform:translateX(-50%);left:50%}.interscrollHeader_bot{margin-top:100vh} </style> <style type="text/css"> @media only screen and (max-width: 480px){.b-zkn p{display:inline-block}} </style></div> <p>“Drivers such as employment growth, new housing supply, affordability hurdles, tightening credit policies and out-of-cycle rate hikes have made their impact; however, the effect on property prices varies from city to city,” Domain’s Dr Nicola Powell said.</p> <p>Houses in <a href=https://www.smartpropertyinvestment.com.au/data/wa/6168/cooloongup>Cooloongup</a> are currently selling at $200,000 and below, and Gosnell and <span class='b-autolinkshadowbox'>Armadale<span class='b-autolinkshadowbox__links'><a href=https://www.smartpropertyinvestment.com.au/data/wa/6112/armadale>Armadale, WA</a> <a href=https://www.smartpropertyinvestment.com.au/data/vic/3143/armadale>Armadale, VIC</a></span></span> also offer dwellings for prices below replacement costs.</p><div class="b_gxh"> <div class="dfp" > <div style="text-align: center; margin-bottom: 15px;" id="div-gpt-ad-1574810607343-0"><!-- /21875762953/spi_premiumnewstile_800x250 --> <script>// <![CDATA[ googletag.cmd.push(function() { googletag.display('div-gpt-ad-1574810607343-0'); }); // ]]></script> </div></div> <style type="text/css"> @media (min-width: 768px) and (max-width: 1024px) { #div-gpt-ad-1574810607343-0 { width: 720px; margin: auto; height: 225px; } } </style></div> <p>Experts believe that the decline in prices may pave the way for the influx of investors looking to buy affordable houses in established areas, hoping to get higher rental returns and the opportunity to add value to the property by taking advantage of large block sizes.</p> <h2>Rental rates</h2> <p>In contrast to the <a href="https://www.smartpropertyinvestment.com.au/research/17907-house-prices-slip-downwards-new-report-finds">decline of house prices</a>, rental rates have shown an impressive growth across Australian property markets.</p> <p>The nationwide median rental rate has risen by 1.1 per cent in the last quarter, bringing the price up to $427 per week, according to CoreLogic’s Quarterly Rental Review.</p> <p>Rental rates in Perth rose by 1.7 per cent to $377, making it the 7th city with the highest median rent, following <a href=https://www.smartpropertyinvestment.com.au/data/nsw/2000/sydney>Sydney</a>, Canberra, Darwin, Melbourne, Brisbane and <a href=https://www.smartpropertyinvestment.com.au/data/tas/7000/hobart>Hobart</a>.</p> <p>This rise in Perth’s rents is the first for almost five years, Professionals Real Estate Group’s Shane <a href=https://www.smartpropertyinvestment.com.au/data/tas/7030/kempton>Kempton</a> said, and it may very well make way for the city’s property market’s recovery.</p> <p>According to him: “Rising rents are generally an early indicator that the property market has bottomed and housing supply is beginning to tighten. These rental rises come at a time when house prices in the more affordable suburbs of Perth are now at rock bottom.”</p> <p>Meanwhile, rental yield has also seen been strong across markets in Australia.</p> <p>Yields in Perth are at 3.92 per cent, preceded by Darwin, Hobart, Canberra, Brisbane and Adelaide, and followed by Sydney and Melbourne.</p> <p>According to <a href="https://www.smartpropertyinvestment.com.au/research/17860-sluggish-rents-on-the-rise-yields-holding-strong">CoreLogic</a>, investors may expect yields to remain strong in the following quarters.</p> <h2>Investment strategy</h2> <p>While the Perth property market is definitely recovering, it will probably take time before it’s back on top, which is why experts strongly recommend a long-term approach when investing in the city.</p> <p>According to OpenCorp’s Michael <a href=https://www.smartpropertyinvestment.com.au/data/wa/6530/beresford>Beresford</a>, with strong fundamentals in the area, including population growth, new infrastructure, affordability, price growth and jobs growth, it could easily take off easily in the next 12 to 18 months.</p> <p>“It makes far more sense to be in markets that are yet to see growth, and then capitalise on the full scale of that growth cycle over time,” he told Smart Property Investment.</p> <p>In the next 20 years, property values across different markets in Perth can double as its population rises to 3.2 million to 4 million by 2038—nearly the size of Melbourne.</p> <p>One of Perth’s primary growth drivers are premium housing in coastal, river and near-city suburbs like <a href=https://www.smartpropertyinvestment.com.au/data/wa/6210/mandurah>Mandurah</a>, <a href=https://www.smartpropertyinvestment.com.au/data/wa/6168/hillman>Hillman</a> and Merriva, which are now being sold for as low as $350,000.</p> <p>Other Perth suburbs expected to see growth in the next months are:</p> <ul> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6037/two-rocks>Two Rocks</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6035/yanchep>Yanchep</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6036/butler>Butler</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6056/midland>Midland</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6058/forrestfield>Forrestfield</a></li> <li>Armadale</li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6164/south-lake>South Lake</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6167/bertram>Bertram</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6171/baldivis>Baldivis</a></li> <li><a href=https://www.smartpropertyinvestment.com.au/data/wa/6169/safety-bay>Safety Bay</a></li> </ul><style>.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }</style>