Today we’re looking at how this impacts you, and how to achieve success in the Perth property market regardless.
- There are approximately 14,000 properties on the residential market in Perth.
- That’s a 34% increase in housing stock compared with this time last year.
- On the back of this, sales have dropped 15.5% compared with this time last year.
- And there’s a 29% increase in property available for rent in WA since this time last year.
- Average days on market for a home in WA is now 67. (Compared with the previous average of 45 days.)
- 57% of sellers in WA recently said they were prepared to discount their asking price.
- Identify suburbs that have experienced long-term capital growth to maximise your investment. (Read more here.)
- If these suburbs are too expensive, look at suburbs close to key-growth areas. (Find out how to do this here.)
- When selling, make sure your real estate agent has a comprehensive selling strategy, which is proven to maximise buyer interest. Ask them for timings and specifics like, where will adverts be placed? Will the campaign roll out all at once?
- Landlords need to lower expectations around rental income. Having a good tenant, paying slightly less than what you’re used to will give you a greater return, as vacancy rates are one of the biggest blows to rental returns.
- If you’re an investor, stay interested in what is happening in the market. The best investments are often made in a slower market, so now is not the time to lay low.
- Consider buying off-the-plan if you can wait for the property to be built. Even if the market improves, you’re still contracted to pay the lower price.
- If you have an existing home loan, talk to a mortgage broker about whether you can save by refinancing to a lower interest rate. Rates are extremely low right now and many lenders are passing these on to borrowers.
- Always consider using a selling method that responds to the property market, as you’re more likely to achieve market value or above for the property you’re selling. Read about the benefits of auction and Set Date Sale selling methods here.
Data from reiwa.com.au.
Why Is There An Oversupply And Why Does It Matter?
The Government has been working hard to incentivise building in WA, and around the country. In fact, many first time homebuyers are choosing to build instead of purchase an existing home because of these incentives. As a result, we’re seeing a spike in home building. In contrast, Perth’s population growth is slowing, which encourages the property surplus even further.
Oversupply in the residential property market matters because economics 101 tells us that when supply is high, demand weakens, and a slower market ensues. As a result, we’re likely to see limited price growth in Western Australia in 2015 and a sluggish market for those looking to sell and rent residential property.
Is There A Solution?
When it comes to oversupply in the WA property market, we believe there are 8 key things you can do to remain successful:
For more information about oversupply in the Perth residential market, please talk to our real estate agents.