Archive for Rental property

Mixed results for Perth rental market in June quarter

Perth’s rental market produced mixed results in the June 2018 quarter, with stable dwelling rents, subdued leasing activity, declining listings and faster leasing times.
REIWA President Hayden Groves said the June quarter’s mixed results were not unusual given Perth’s rental market was in a transitional phase.

“Although the worst of the downturn appears to be behind us, it’s not uncommon to see results fluctuate as the market transitions into a recovery.

“The change in seasons has also contributed to this quarter’s results, with the cooler weather impacting activity levels. We tend to see activity slow during the winter months before picking up again in spring,” Mr Groves said.

Median rent prices

Perth’s overall median rent price remained stable in the June quarter, holding at $350 per week for a fifth consecutive quarter.

“Rent prices have been stable since the June 2017 quarter, which is pleasing. After experiencing prolonged periods of freefalling rent prices, the stability we’ve observed over the last 12 months is a welcome change and should provide landlords with confidence,” Mr Groves said.

Although Perth’s overall rent was stable, reiwa.com analysis shows 102 suburbs across the metro area did experience median rent price growth.

“The five best performing suburbs for rent price growth in the June quarter were Attadale (up 75.8 per cent to $580 per week), Jolimont (up 50.9 per cent to $423 per week), Burswood (up 33.3 per cent to $480 per week), Booragoon (up 28.4 per cent to $475 per week) and Hamersley (up 28.4 per cent to $430 per week),” Mr Groves said.

“Other top performing suburbs were Karawara, North Fremantle, Mount Nasura, Mount Claremont and Hillarys.”

Leasing activity

There were 12,633 properties leased during the June 2018 quarter.

Mr Groves said leasing activity had declined 10.4 per cent over the June quarter and was down 4.1 per cent compared to the June 2017 quarter.

“The latest population figures for WA shows migration into the state has declined by five per cent, which has likely influenced leasing activity levels in Perth. The rental market feels the impact of changes in population first, with new migrants to the state relying on rental accommodation to set themselves up.

“Tenants are also not moving as much as they were when prices were declining and there were good deals to be had. After 12 months of stable rent prices, lower activity levels suggest tenants are feeling confident rental prices have found a floor and therefore more inclined to stay put,” Mr Groves said.

Despite the overall reduction in leasing activity, reiwa.com data shows there were 71 suburbs across the metro area which saw leasing activity improve.

“The five suburbs which saw the biggest improvement in activity were Brookdale (up 88.9 per cent), Ocean Reef (up 75 per cent), Kallaroo (up 63.6 per cent), Parmelia (up 48.3 per cent) and Hamersley (up 46.2 per cent).”

Rental listings

There were 8,293 properties for rent in Perth at the end of the June 2018 quarter.

Mr Groves said this figure was 2.5 per cent lower than the March 2018 quarter figure and 22.9 per cent lower than the June 2017 quarter.

“Rental listings in the metro area have declined significantly over the last 12 months, with far fewer properties available for rent this year compared to last.

“A key driver for this improvement is the slowdown of new dwelling commencements. With less new properties coming onto the market, existing rental stock is being soaked up faster, putting downward pressure on listing volumes,” Mr Groves said.

Average leasing time

It took 46 days on average to find a tenant in the June quarter, which is two days faster than the March quarter.

“It is also six days faster to lease a property than it was during last year’s June quarter, which is a notable improvement,” Mr Groves said.

“Although leasing activity softened during the June quarter, activity levels remain above long term averages. This, combined with rapidly decreasing listings means tenants are needing to act fa

Seven common mistakes investors makeI

uWhen it comes to winning big in real estate, many turn to property investment. But achieving success takes time and patience, with only a handful making it past their first investment.
To ensure you don’t fall into the property trap talk to an expert and do research.

1. Don’t buy in an overheated market

Momentum Wealth Research Advisor Shaun Strickland said many investors see reports of unprecedented growth in one area and assume this must be the next ‘boom’ suburb.

“If you are reading about a boom in the media, chances are it is already too late to be buying in the suburb. Instead, investors need to be identifying areas that are likely to outperform in the long-term, which is where the advice of a professional buyer’s agent could prove invaluable,” Mr Strickland said.

2. Not doing enough homework

The property market is always changing, and you will never know EVERYTHING there is to know about real estate. But, doing your homework nonetheless is essential and studying the suburb you wish to buy in will make it worth your while.

Mr Strickland believes research is the cornerstone to a successful property investment.

“Identifying high-performing properties requires analysis of demand and supply, knowledge of the local demographic, consistent market monitoring and awareness of other key growth factors,” he said.

“Once investors have narrowed their search to a specific suburb, they will then need to assess the potential of individual streets and properties.”

Another common mistake investors make is that they tend to only research properties within five kilometres of their current location.

Mr Strickland also said “whilst it’s a natural reaction for investors to look in areas they are most familiar with, this could result in them missing out on key investment opportunities elsewhere.”

3. No backup cash

According to Momentum Wealth Finance Team Leader Caylum Merrick, many investors fall into the trap of not saving up a sufficient cash buffer once they’ve actually acquired a property, which could leave them in a disadvantaged position should unexpected scenarios arise such as property repairs, rises in interest rates or tenants leaving a property.

Mr Merrick advises investors to set aside a cash buffer to cover unexpected costs for each property in their portfolio.

“We also advise investors to work with an experienced property manager to understand any of the potential costs that could occur for their particular property,” he said.

Find a property manager

4. Cross-collateralisation

This is when more than one property is used as security for a loan or multiple loans.

“Cross-collateralisation can significantly reduce an investor’s ability to borrow in the future, so it is especially important to seek the help of a mortgage specialist who fully understands their financial needs and long-term investment goals.

“Choosing the right loan strategy from the start can significantly maximise an investor’s borrowing capacity and give them more flexibility moving forward,” Mr Merrick said.

5. No plan, no gain

All property investors have one goal – to build a lucrative property portfolio. However getting there without a plan or goal will backfire. As the old saying goes, if you fail to plan you plan to fail.

You need to have an end vision of where you want to end up and then follow a strategic plan to get there.

6. Thinking with your heart not your head

With the Perth property market starting to show signs of recovery and stabilisation, interest will grow from property investors, meaning buyers need to act fast to secure their ideal property.

An investment should be look at as a business decision. Making an ’emotional purchase’ is to be avoided at all costs. A decision driven by your heart can lead you to over-capitalise rather than prioritise the best outcome for your investment goals.

Base your decision on facts, statistics and research.

7. Choosing to self-manage

Seeking the advice of a professional can help you avoid making simple mistakes, and they can also play a vital role in helping investors identify opportunities to maximise rental returns.

“Property investment experts can assist investors in identifying properties with the highest growth prospects that a single investor may not be able to discover or analyse on his or her own,” Mr Strickland said.

It can be very daunting trying to handle all aspects of property investment on your own, especially if you have a portfolio of more than one or two properties.

Momentum Wealth Asset Management Advisor Clare Christiansen said property managers play an important role not only in the day-to-day running of properties, but also in supporting an investor’s overall investment strategy and protecting their long-term wealth.

“Property investment doesn’t stop at the acquisition of a property,” she said.

“Savvy investors will also realise that smart asset management is key to their long-term wealth strategy.”

Read more about why property managers are vital to a successful investment.

The 10 Perth suburbs where tenants are snapping up rentals the fastest

White Gum Valley, Scarborough and Shenton Park are among the 10 Perth suburbs where landlords are finding tenants for their rental properties the fastest.

REIWA President Hayden Groves said while on average it takes Perth landlords 45 days to secure a tenant for their rental, numerous suburbs across the metro area were experiencing faster leasing times.

“In White Gum Valley for example, landlords are finding tenants for their rental properties in approximately 27 days – 18 days faster than the Perth Metro average, while in Scarborough and Shenton Park it takes 28 days and in Pearsall and Leederville 29 days,” Mr Groves said.

Best time to buy in Perth since 2013

March 2018 quarter has revealed it’s the best time to buy in Perth since 2013.

The Index, released quarterly, assesses whether it’s better to buy or rent in Perth based on past and current trends in the economic and property market climate.

REIWA President Hayden Groves said the March 2018 quarter index showed the annual rate of house price growth required over 10 years to break even in the Buy-Rent Index had declined from 3.3 per cent to 3.1 per cent over the quarter, suggesting an improvement for prospective homebuyers weighing up the decision.

“To put that into perspective, Perth’s annual house price growth rate has been 5.9 per cent for the last 15 years. Based on the March 2018 quarter Index, house prices in Perth would only need to grow by more than 3.1 per cent annually for buying to be considered more financially beneficial than renting,” Mr Groves said.

“This improvement in buying conditions can be attributed to the Perth median house price softening by 1.9 per cent during the March quarter, while the median house rent price increased $5 to $360 per week. We also saw the 10 year average mortgage rate drop to 6.43 per cent, which means home owners are paying less on their mortgage repayments.

“This is the most affordable buying environment we’ve seen in Perth for some time, so if you’ve been weighing up whether to buy, now is the time to take advantage of favourable market conditions,” Mr Groves said.

Mr J-Han Ho, a Property Researcher and Senior Lecturer in the School of Economics and Finance at Curtin University, said the data indicated a continued improvement for the home buyer in the near future.

“Our analysis shows home buyers gaining an advantage, largely due to the low interest rates for home loans, home ownership costs continuing to be affordable and the median rents stabilising,” Mr Ho said.

Real Facts. Pictures worth a thousand words.

Member Real Facts 22 May 2018 Sales activity experienced stability over the week, with REIWA members reporting no change in weekly sales at 538.

The overall steadiness in weekly sales is attributed to a seven per cent rise in house sales, a four per cent fall in unit sales, and a 34 per cent fall in vacant land sales over 1th2 e week. 2 3 PROPERTY SALES TOP SELLING SUBURBS

Total properties listed for sale grew over week to 14,896. Listings for houses and units both remained stable.

Whilst listings for vacant HOUSES 418 North of the River
Morley 9 land increased by four per cent. UNITS 72 Bayswater 7

The total number of listings recorded this week are on par with levels seen four weeks ago, but are one per cent lower than levels seen a year ago.

LAND 48 Member Real Facts 22 May 2018 Turning to the rental market, REIWA members reported total properties available for rent fell to 8,324 over the week.

Housing affordability has declined in all states and territories, according to a new report.

New report shows housing affordability has declined in Western AustraliaNEW
12 March 2018

The Real Estate Institute of Australia (REIA) have released the findings of its latest Housing Affordability Report, which found housing affordability declined in Western Australia in the December 2017 quarter.

The national report, which is produced in partnership with Adelaide Bank, showed housing affordability had declined across all states and territories, and rental affordability had declined in every state and territory except for Western Australia and New South Wales.

REIA President Malcolm Gunning said a coordinated and aligned approach by all three levels of Government were needed to address the housing affordability issue.

“We need to address this with some urgency and reform the planning and approval process. We need all tiers of Government involved and implementing change.

“REIA believes a first step in this is the appointment of a Minister of Property Services. This would also recognise the importance of the property sector as a driver of economic growth and employment. Property investment supported by historically low interest rates has been a significant contributor to growth in the Australian economy since 2013-14 as we transition away from a decade-long reliance on mining,” Mr Gunning said.

Housing affordability results for WA
There was a mixed bag of results across WA in the December 2017 quarter, with housing affordability worsening over the quarter but improving when compared to the December 2016 quarter.

The report found the proportion of income required to meet loan repayments increased 1.5 per cent to 23.9 per cent in the three months to December 2017 and declined by 0.3 per cent decline compared to the December 2016 quarter.

First home buyers

The number of first home buyers in WA decreased to 3,996 in the December 2017 quarter, a decrease of 9.8 per cent over the quarter but an increase of 4.9 per cent compared to the same time last year.

Of all Australian first home buyers over the quarter, 12.9 per cent were from WA, while the proportion of first home buyers in the state’s owner-occupier market was 34 per cent.

The average loan to first home buyers increased to $316,067, an increase of 4.1 per cent over the quarter but a decrease of 1.5 per cent compared to the December quarter 2016.

Loans

The total number of loans (excluding refinancing) in WA decreased to 11,744, a decrease of 4.2 per cent over the quarter and a decrease of 2.7 per cent compared to the same time last year.

The average loan size increased to $352,796, an increase of 6.8 per cent over the quarter and 0.5 per cent compared to the December quarter 2016.

Perth rental market

Rental affordability in WA remained stable during the December quarter, with the proportion of family income required to meet the median rent remaining at 16.4 per cent, the same as the previous quarter but a decrease of 1.3 percentage points compared to the year before.

For more information about the WA property market, visit the WA market page.

https://reiwa.com.au/

Regional WA outperforms Perth for price growth in latest quarter

Regional WA’s overall median house price increased 2.9 per cent during the December 2017 quarter, outperforming the Perth Metro region.

REIWA President Hayden Groves said eight regional centres experienced positive median house price growth, with Karratha the top performer with a 13.5 per cent improvement.

“Busselton, Albany and Esperance also recorded strong price growth, lifting 9.8 per cent, 7.2 per cent and 6.3 per cent respectively.

“Pleasingly, house prices improved across the board, with centres both north and south of Perth showing positive growth. Consumer sentiment in WA improved considerably in the December quarter, up 13.5 per cent which has had a positive flow on effect to the property market. West Australians are feeling more optimistic and buyer enthusiasm is returning,” Mr Groves said.

Kalgoorlie/Boulder, Northam and Port Hedland were the only regions to record declines.

“After recording a significant 19.5 per cent increase in median house price in the September quarter, Port Hedland’s median house price had a minor adjustment in the December quarter,” Mr Groves said.

View the REIWA Regional WA Outperforms Perth for Price Growth

Perth property market begins its recovery in December quarter

Perth property market begins its recovery in December quarterNEW
06 February 2018

The Perth property market ended 2017 on a positive note, with December quarter data showing improvements in median prices, sales activity, listing levels and average selling days.

REIWA President Hayden Groves said it boded well for Perth that all key indicators had improved over the quarter.

“The Perth market found its floor and stabilised in the back half of 2017. We now appear to be entering a recovery phase, though REIWA remains cautious about expectations of rapid growth in the next 12 months,” Mr Groves said.

Median house and unit price
Perth’s preliminary median house price increased 1.2 per cent to $516,000 in the December quarter 2017.

“Once all sales have settled, we expect the final December quarter median to lift to $520,000, which is a notable improvement on the September quarter median of $510,000.

“On an annual basis, the Perth market is very stable. We’ve observed consistent price levels between the December 2016 and 2017 quarters which is a strong signifier the market has turned a corner,” Mr Groves said.

Perth’s median unit price is $405,000 for the December 2017 quarter which is a 1.3 per cent increase on the September quarter.

“It’s encouraging to see Perth’s house and unit medians increase over the quarter because it suggests one sector hasn’t recovered at the expense of the other,” Mr Groves said.

Sales activity
There were 4,946 dwelling sales in Perth in the December quarter.

Mr Groves said this figure was expected to lift to 6,700 once all sales had settled, putting it significantly above the September quarter sales figure.

“Traditionally, the September quarter outperforms the December quarter, but that wasn’t the case in 2017. The December quarter is on track to record 14 per cent more sales than the September quarter,” Mr Groves said.

REIWA analysis shows the composition of sales shifted in the December quarter in Perth, with more transactions occurring above $700,000.

“We’ve observed a surge of activity in Perth’s aspirational suburbs, with buyers recognising there is good opportunity to secure a home in these areas which might have previously been considered unattainable by many,” Mr Groves said.

“This spike in sales above $700,000 has also contributed to Perth’s median house price increasing over the quarter.”

Listings for sale
There were 13,088 properties for sale in Perth at the end of the December quarter.

Mr Groves said this was on par with the September quarter figure and six per cent less than the December 2016 quarter figure.

“There were 800 fewer listings in Perth at the end of 2017 than there was in 2016 and some 1,300 less than there were at the same time 2015. We have consistently seen stock levels decline over the last two years as the market trends towards parity,” Mr Groves said.

“Declining listing levels combined with notable improvements in sales activity has helped restore net-demand. With buyer activity increasing, stock levels are being absorbed faster,” Mr Groves said.

Average selling days
It was 10 days faster to sell in the December quarter than it was in the September quarter, with it taking on average 60 days to secure a sale.

It’s been two years since it was this quick to sell in Perth. The combination of sellers’ preparedness to meet the market and buyer appetite for well-priced property has significantly shortened days-on-market,” Mr Groves said.

View more WA market information

https://reiwa.com.au/about-us/news/perth-property-market-begins-its-recovery-in-december-quarter/

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Perth rental market subdued in June quarter, but annual leasing figures remain strong

Leasing activity in Perth was more subdued in the June quarter than it was in the March quarter, but when compared to the same time in 2016 reiwa.com data shows leasing levels in Perth increased by six per cent.

REIWA President Hayden Groves said although activity had dropped off across the metro area in the three months to June, annual activity levels had continued to improve.

“The data for the June quarter 2017 clearly shows an uptick in activity on an annual basis across the board, which is pleasing. We’re seeing notably more properties being leased now than we were this time last year.

“All five sub-regions saw lifts in their annual activity levels. The stand out performers were the South East and Central sub-regions, which improved by 10.5 per cent and 6.6 per cent respectively when comparing June quarter 2017 to June quarter 2016,” Mr Groves said.

Despite Perth experiencing a decline in activity on a quarterly basis, there were a number of suburbs throughout the metro area which saw the volume of leased rentals increase over the quarter.

“Huntingdale, Booragoon, Bedford, Aubin Grove and Sorrento saw the biggest improvement in leasing activity in the three months to June 2017,” Mr Groves said.

Median rent price
Perth’s overall median rent price softened in the June quarter, edging back slightly to $350 per week from $360 in the March quarter.

Mr Groves said this was a trend felt across each of the sub-regions, but a number of suburbs had stood out over the quarter, recording increases in their overall median rent price.

“Karrinyup in the Central sub-region was the best performing suburb for rent price, with its overall median lifting to $570 per week for the three months to June.

“Other suburbs to record positive growth to their median rent prices were Booragoon, East Fremantle, Mount Pleasant and Mindarie,” Mr Groves said.

reiwa.com data shows the median house rent price for the three months to June came in at $360 per week, while Perth’s median unit price was recorded at $330 per week.

Average leasing days
It took an average of 52 days for Perth landlords to secure a tenant for their rental in the June quarter.

Mr Groves said the figure recorded for the three months to June was fairly steady on the March quarter, having only increased by one day.

“This stability was felt across all sub-regions, with only minor changes recorded in the average leasing day figure for the June quarter. The North West sub-region was the only sub-region to experience a reduction in the number of days it took to lease a property, while the South East sub-region saw no change,” Mr Groves said.
Transcript from REIWA