Insights of a Valuer
Rod Davidson, National Director at LMW Advisory WA, Valuer, Business Strategist and Coach, was the guest speaker at a property information evening co-hosted by SECFI in March 2017. He shared his insights into the current Perth property market and where it’s headed … there was a collective sigh of relief from the crowd as Rod shared his ‘mostly’ positive outlook for the Perth market.
Contrary to many reports you may have heard in recent years and months about the Perth market, Rod had some very positive observations and statistics to share about the current WA market and some words of warning about the Sydney market. He said the national property market currently appears to be repeating the historical trend from early 2000 when the Sydney market last stalled.
When Sydney came off the boil after the last boom, investor money flowed across the Nullabor to Perth, which was very flat in early 2000. Rod said they are seeing the same pattern emerging now, with Eastern States investors looking to the Perth market which current represents some excellent buying opportunities.
Rod made reference to the ‘Average House Price and Household Income’ diagram below, which highlights the comparative affordability of the WA housing market versus NSW in 2001, 2011 and 2016. In 2016, Syndey’s proportion of household income required to service an 80% LVR mortgage was 44.5%, while Perth’s was just 29.4% of household income … and weekly household incomes are almost equal between the 2 cities. The other interesting statistic is Sydney’s house price to income ratio at 9.4 times, is almost double that of Perth’s which is currently sitting at 5.5 times.
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In the ‘Cycle of Market Emotions’ diagram below, Rod pointed out he believes the Sydney property cycle is currently sitting between ‘euphoria’ and ‘anxiety’, while in his opinion the Perth market is poised somewhere around ‘hope’. Therefore, it’s currently an excellent time to take advantage of depressed prices and buy in the Perth market, but like always, there are pockets of the market that will outperform others and be quicker to correct. He believes the first areas to be impacted by the positive change in the Perth market will be within 10-15km of the CBD and along the coast, but warned there is still significant pain ahead for inner-city apartment owners.
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Now’s a great time to look at upgrading your home and buying your next investment property. Contact us and we’ll put you in touch with a finance broker who’s well versed in the field of investment lending so you can explore your options. We’re also happy to help with a free property investment analysis, just ask.