As is my want, I regularly trawl the property data and property investor forums trying to divine what is real and what is the hyperbole of investor sentiment and the rants of those with vested interests (real estate agents included).
Are we at the brink of financial Armageddon? Or merely suffering the mother of all hangovers, paying for a big night out on red wine, rum and “I can’t remember how I got home”?
Reality; Perth is an investor’s paradise at present, bouncing somewhere along the bottom of a market curve. The irony, of course, is that investors are too scared to pull the trigger, paralyzed like surfers on the beach talking about whether there is a shark in the water, or not.
Right now there is time and choice for the savvy to exercise their skills in buying well and strap in for the long haul. For those that add real value (developers, builders, and trades) opportunities abound. The market is almost solely devoid of Mum and Dad investors, whose access to investment funds have dried up in line with APRA lending regulation and banks de-risking their loan books. The pool of competing investment buyers is shallow.
In my part of the world, within 5km south east of the Perth CBD, we are in bread and butter real estate mode. Good schools, a walkable community, very short commute times, lifestyle options (cafe’s, restaurants, river, casino, Stadium) mean that owner occupiers are buying with comfort. They see the value now. It is not a speculative promise of future nirvana and a utopian suburban existence (cue new-home far-flung outer suburb real estate spiel).
Our home opens are generally busy with Buyers ready to write offers. Confident in the discount being offered on past premiums and believing in the value on offer. This core sales activity in well serviced established suburbs is set to consolidate with the state Labor government removing the financial carrot to First Home Buyers’ (FHB) buying new builds in far-flung suburbs (set to soon reduce from $15,000 – $10,000).
Interestingly in our part of the world, it is the investment grade stock that has suffered the brunt of the discounting. A home that is tired and has been neglected over time just doesn’t appeal to owner occupier Buyers. Buyers won’t just “paint and garden”, the Seller must do that for them.
So don’t be afraid. Recognize value. Use this unique part of the market. Buy in good suburbs. There is a reason that there are 10 other people in the home open with you. Perth even now is experiencing net population growth, off the back of a prolific spate of procreational activity. Of course, the naysayers say babies don’t buy houses. I say they are driving decision making around the size of house, schools and commuting time constraints. In this market, the babies are the reason people move.
The fundamentals don’t change. People live in houses, in the best place they can afford. Tick these boxes and you have a marketplace. It exists without the hyperbole and without the spruiking.
Derek Baston
