After a slow, cold, wet winter the clouds have rolled back and the Buyers are back in force!
The last four weeks in Victoria Park and surrounds have been a flurry of activity for Baston & Co. Property, with seven sales last month and three currently under negotiation early in November. Multiple offers are the feature of this activity spurt.
What’s so different? Nothing really, is the answer. What does that mean? Well it appears that Perthites have accepted the new norms. They have put the cataclysmic hangover of boom-time behind them.
Conversations have shifted. Less the of “the world is ending” and more focus on just getting on with life. The Buyers are predominantly owner occupiers who, in an environment of historically low interest rates and attractive pricing, are using the opportunity to get a foot in the door of the suburb they like. Life goes on. People grow. They move beyond the negative news. They still have lives. Wants. Desires. And buying a home is a huge expression of this.
The conversations in home opens are now positive. The tone is pro-active. The people I deal with both Sellers and Buyers are looking ahead.
Importantly the foundations of this change are solid. The banks have changed their lending models. More equity is needed and a better paper trail than in years past. Young first time Buyers have had to save money first to make the dream happen and they are OK with that. It is a paradigm shift. Delayed gratification is back in vogue.
So am I saying the market has turned? Yes. The worst is behind us. The sun is shining and the green shoots of confidence are emerging.
Is price growth on the horizon? Probably not in the near term. Mum and Dad investment dollars are not being spent on residential real estate. That speculative driver simply isn’t there. And maybe for now that is a good thing.
A market place is like a pyramid, the broader and more substantial the base- the better. A foundation built on needs, savings and reality bodes well for the future. It is a position of strength. We don’t need the heady days of the boom anytime soon. Right now Perth is building that base. On the other hand the markets in Sydney and Melbourne are looking like inverted pyramids. Teetering upside down on their points. Ready to topple at some point soon.
Interestingly the demise of the major capital city markets on the east coast may be the beginnings of the Perth property upswing as their investors look for new opportunities.
It looks like smooth seas and light winds are the order of the day for the Perth market for now, and a freshening breeze at our back may not be far away.
Derek Baston
