With a report claiming Perth has finally begun its recovery period, we turn to property experts based in Perth and ask whether they think Perth is recovering.
Property investment consultancy Momentum Wealth recently came out with the Residential Property Spotlight: Perth report, claiming that Perth had begun its recovery period, as reported previously, after months of commentators on Smart Property Investment warned investors to buy soon before the recovery begins.
We sought to clarify these claims, turning to experts in property to find out whether Perth really has entered the recovery period or not.
Damian Collins, managing director at Momentum Wealth, who commented previously on the Residential Property Spotlight: Perth report, elaborated further and said that signs of recovery have been recently been mounting through the observation of the levels of new supply being built.
“The number of dwellings approved for construction has been on a downward trend since peaking in December 2014, while dwelling completions, which is a lagging indicator from approvals, have been declining since peaking in June 2016,” Mr Collins said.
“It wasn’t until this peak in completions was reached, and excess stock began to be absorbed, that supply and demand could begin to rebalance, and we’re now starting to see this unfold.”
He also added the number of properties for sale is also indicative of a recovery period. Mr Collins stated the number of properties for sale peaked at almost 17,000 in 2015, while in July this year hit a two-year low of 13,600.
“With a balanced market considered to be between 12,000 and 13,000 properties for sale, it’s clear the Perth market is slowly rebalancing, which will help underpin property prices going forward,” he said.
Travis Coleman, CEO of ACTON Real Estate, agreed with the report, saying he has personally seen transactions going through particularly in Perth’s western suburbs.
“We have 23 offices in Western Australia, and [they’re] all reporting increased buyer activity towards the end of June into July,” Mr Coleman said.
“We’ve definitely seen a recovery there, and we’re definitely beyond bottoming out and starting to improve slightly.”
During this recovery period, Mr Coleman has also noticed a rise in off-market transactions.
“Even up until the end of the financial year and into the winter school holiday period, Perth is typically a very quiet time for the market. We’ve actually seen a number of transactions going through across the board,” he said.
Daniel McQuillan, director at Investwise, also believed that Perth’s recovery period was oncoming, and the new property cycle would be different to previous cycles.
“What’s going to happen is we will start to see online a lot of the investment come into Perth by way of new stadiums and marinas, and improvements to airports and highways and freeways,” Mr McQuillan predicted.
“I think a lot of that employment and a lot of that money have been spent internally within the West Australian economy without changing hands. I think everybody’s expecting it to give. I do think the resource sector will start coming into play as well.”
Nick Wallace, principal of LJ Hooker Applecross, agreed with the report, saying that the recovery period was long overdue.
“What I’m starting to see is that buy activity is increasing, so there’s a lot more buyers in the market [now] than there was this time last year,” Mr Wallace said.