There’s no denying that Perth saw a more subdued property market in the second half of 2014 which was always expected to follow through in the New Year. The predictions were not wrong, with 2015 bringing a more conservative property market and an imbalance between supply and demand. Yet, when it comes to property predictions, it is important not to give into the hype, as it is almost impossible to predict what the market has in store with 100% certainty. Below we look at some of this year’s predictions, while encouraging you to conduct your own research and seek advice from your local Peard Real Estate expert.
Despite an annual growth of 3.7% in 2014, Perth home owners will see a more subdued market in the coming months.
Forecasters suggest sales will fall marginally due to three main factors:
Throughout WA it is currently more attractive to rent than it is to buy.
Figures released by Landgate show sales are down 5% whilst supply is up 35%.
Listings have increased by 18% due to the lack of first home buyer activity in the established housing market.
It is said that the above three factors, as well as falling rent prices have encouraged potential property investors to keep their money in their pockets until the market starts to rise.
Peard Real Estate CEO Peter Peard says there has been strong growth in Perth house prices over the past 18 months and it is normal for the market to have slowed.
“Prices are expected to ease with a potential downward market correction in prices over the coming year.”
The downturn in the WA resource sector is also having an impact on property throughout the state. There is a prominent drag on effect on the economy and consumer confidence with more fear of unemployment throughout Perth surfacing.
There has also been a significant influx in dwellings throughout WA due for completion in 2015 and 2016. These estimated 22,000 new dwellings will likely lead to a flood of property available on the market, causing an increase in supply. When there are more properties available on the market and stunted population growth, a fall in demand and weak consumer sentiment will follow weakening the market.
Yet, on the positive side, interest rates are still at a record low, and are likely to remain low for the remainder of the year. Some finance experts even speculate further cuts in April and June this year, with hopes that this will boost prices by up to 5% around the country and continue to support market demand.
Furthermore, the South West and Mandurah markets remain strong as they miss the rest of the state’s weakening market conditions. This is encouraging news for property owners throughout these areas and investors should keep an eye on these markets to watch for opportunity.
Across the market, experts remain confident that as long as key market drivers such as population growth, interest rates and the overall state of the economy remain as they currently are, there should be no reason why buyers do not engage in the property market over the next 3 to 9 months. In particular, established homes priced between $500,000 and $900,000 are expected to experience the most activity in the market.