It has been a while between blogs! And I have an excuse.
We have been bloody busy!
In a marketplace that saw the lowest sales volumes for 25 years. According to REIWA just 26,223 houses and units traded hands in 2017. Even Paul Keating’s 1990 recession “we had to have” was a better year, with 27,601 dwellings changing hands. And to double down on just how low last year’s sales figures really were, consider that Perth’s housing and apartment stock has doubled since 1990!
2017 really was awfully tough.
And now just 12 months on, a chalk and cheese transformation is under way.
Here on the ground in the Town of Victoria Park, sales volumes are up. Our agency and its dedicated team are looking down the barrel of a record year (in 16 years of sales activity!).
Last Tuesday I was at a conference in Sydney. Sitting in a room of 550 shiny suited, suitably coiffured, East coast estate agents. I felt every bit the West coast cousin, my pants were too long and I was wearing socks with my shoes. Who knew the hipster plague had slipped so far up the food chain over here…
The leading New South Wales Agent (Alexander Phillips) in a panel discussion warned those agents that their market was about to drop, and 20-25% of agents may not be in the industry in 12 months. Melbourne and Sydney are about to take the medicine we took 4 years ago. The next speaker was a Domain statistician who discussed the future of the Melbourne and Sydney market, then pointed to Perth as the ‘sleeper’, and he intimated if he were investing in a capital city (outside of Hobart which is experiencing double digit growth) Perth has to be the next cab off the rank.
On the ground we are already seeing positive changes to our marketplace. Investors are starting to wake from hibernation, the decrease in vacancy rates and re-awakening of the corporate rental market driving their interest.
In Western Australia the klaxon horn of the resource sector has rung, with new lithium, gold, mineral sand and nickel projects, iron ore mine expansions and extensive oil and gas activity. Our farmers are enjoying, by and large, a respectable to very good season, in an environment of higher prices and a lower Australian dollar. Money is moving in the Western Australian economy.
The first home buyers are back in the established home market, with prices finally low enough to lure them away from the state government’s $10,000 sugar hit to buy new builds.
It’s now or never. This is the last sniff of Perth’s doldrums. By 2020 reasonable forecasters are talking about double digit growth.
Anecdotally I hear that the outer suburbs are still slow, regional centres (excluding mining towns) are not exciting and that Perth apartments still are cutting away on price. Conversely, the western suburbs are healthy, inner ring suburbs are moving and especially in these suburbs detached dwellings and single tier development sites have risen in value over the last 12 months.
There is a lot to be positive about.
They say the darkest hour is before the storm. Right now there is every reason to believe the storm has well and truly passed.
Derek Baston.
Baston & Co. Property
