House Price Hope
by Kim Macdonald and Dylan Caporn
Calling the bottom of the market comes amid some positive trends in the market, including the hunt for almost 100 rental properties in the western suburbs for resources sector migrants moving to Perth.
Valuation expert Gavin Hegney, builder Dale Alcock, Housing Industry Association executive director John Gelavis and Real Estate Institute of WA boss Hayden Groves believed there were unlikely to be any more significant falls in house prices, which recently hit a median price of $515,000. Others, including land developer Nigel Satterley and Urbis property consultant David Cresp, said the bottom of the market was close. Mr Cresp forecast prices would start rising next year.
Mr Hegney said there were signs that Perth had already started the first stage of recovery, which was the resurgence of trade-up buyers pushing up the price of entry-level homes in aspirational areas, such as the inner city, western suburbs and the waterfront.
“I am 90 per cent certain we’ve hit the bottom and probably 80 per cent certain we have passed the bottom because recovery is already showing up in these areas, but it won’t show up across the board just yet,” he said.
Mr Hegney said the rental and building markets were “still in a world of pain” but recovery would follow for these soon after the recovery in the established market.
He said it was not just the resources downturn, but also a confidence crisis, that had caused Perth’s property slump in recent years.
In a move that echoes the mining boom years, real estate agent Tonia McNeilly recently distributed pamphlets through the western suburbs seeking more than 60 properties for relocation agents working for TechnipFMC, Shell, Chevron and Woodside.
Ms McNeilly said she needed 60 homes for TechnipFMC employees, 30 for Chevron and a handful for the other resource giants.
TechnipFMC confirmed it was looking for properties but declined to say how many, though Chevron denied it was seeking homes.
Mr Groves conceded it was not the first time he had picked the bottom of the market.
However, he said he was confident there would not be any more significant losses because there had been a clear stabilisation in recent months, including two stable quarters in the rental market after years of freefall.
Mr Alcock, one of the biggest builders in the State, said the market was still slow but there had been improved traffic and inquiries through his centres. He said confidence in the economy appeared to be improving.
“I’m of the view we are entering the recovery stage, but it won’t really get up and running just yet,” Mr Alcock said.
Mr Gelavis said the market had normalised after coming out of the biggest housing boom Perth had seen. “With record low interest rates, it is a great time to be building a home because you’ve got fast build times because of the trade availability,” he said.
“High availability of trades, which means more affordability in terms of the cost of the trades, supplies and materials. You’re going to get your home completed in a shorter period of time.”
Mr Satterley said he had not seen the market so competitive in his decades working in the industry. “The property market never stops, things are tough, but the market never stops,” he said.
Article taken from The West Australian, June 13, 2017.