The Perth property market is an unpredictable one, with many surprises in store for buyers and sellers alike. This article delves into the various housing statistics and forecasts, property value fluctuations, loss-making areas, and market volatility of the Perth property market.
We provide advice on how to make informed investment decisions and consider the long-term trends in the housing market. With this comprehensive analysis, readers will gain an in-depth understanding of the Perth property market and its surprising trends.
Key Takeaways
- Perth homes are predicted to grow in price at almost twice the national average over the next nine months.
- The current rate of construction in Perth is slow, with only one new home being delivered for every eight new people.
- Around 80% of sellers in one apartment block have sold at a loss this year, indicating that not every property will experience good capital gains.
- The property market in Perth is characterized by market volatility and fluctuations, emphasizing the importance of considering long-term trends and potential risks before making any buying or selling decisions.
KPMG Predictions for Perth Housing
KPMG recently released forecasts predicting that Perth homes will experience a substantial price growth over the next nine months, nearly twice the national average. This indicates that the Perth housing market is experiencing an upward trend, driven by the slow rate of construction and population growth.
The imbalance between supply and demand is putting pressure on housing prices, with the value of many properties increasing faster than expected. This is in sharp contrast to the current state of the property market in some areas, such as Subiaco and Mosman Park, where median unit prices have decreased compared to 2008.
Overall, the KPMG predictions show that buyers should be aware of the potential risks and long-term trends in the Perth housing market before making any decisions.
Property Value Fluctuations
Although prices of properties are generally increasing, not every property is experiencing good capital gains. Around 80% of sellers in one apartment block have sold at a loss this year, with apartments usually increasing in value slower than houses.
This is partly due to the supply and demand problem in the housing market, which puts upward pressure on prices. Factors such as location, amenities, and market demand can also have an impact on property values.
With the population growth in Perth, the current rate of construction is slow with only one new home being delivered for every eight new people. This highlights the need to be cautious and consider long-term trends before making any buying or selling decisions.
Losses in Specific Areas
Despite the generally increasing prices of properties, certain areas have seen losses for some sellers. The Towers complex at Elizabeth Quay is one example, with most sellers this year experiencing a loss.
Only two out of 11 apartments sold in 2023 earned a profit, and the loss-making apartments were purchased between 2015 and 2020, with losses ranging from 2.5% to 20%. This has resulted in owner-occupiers feeling disappointment, as they walk away with a debt.
Factors such as location, amenities, and market demand can influence property values, so it is important to consider all these elements before making an investment. Ultimately, it is important to be mindful of potential risks and to choose wisely when it comes to property investments.
Market Volatility
The Perth property market has experienced a great deal of volatility in recent years. Various factors such as location, amenities, and market demand can all affect property values. The impact of population growth has also been a major factor, with a low rate of construction relative to the population.
This has put upward pressure on prices and made it difficult to accurately predict the value of properties. It is essential to consider long-term trends and potential risks when investing in property.
It is also important to remember that not every property will experience good capital gains, and some areas may even experience a decrease in median prices. Overall, it is essential to carefully consider the specific circumstances of the property market before making buying or selling decisions.
Current Construction Rate in Perth
The current rate of construction in Perth is slow, with only one new home being delivered for every eight new people. This means that the population growth is outpacing the rate of new home builds, causing a supply and demand problem in the housing market.
This puts upward pressure on prices, as buyers are competing for limited stock. The slow rate of construction also means that there are fewer options available for buyers, particularly in the inner city market. This can cause competition to drive prices even higher.
The slow construction rate is an important factor to consider when looking at the Perth property market, as it can affect the availability and affordability of homes.
Supply and Demand of Housing Market
Despite the slow rate of construction in Perth, the demand for housing has put upward pressure on the property market, creating a supply and demand problem. The slow construction rate has a direct impact on the rising population pressure, with only one new home being built for every eight people.
This has resulted in higher prices and more competition among buyers for available housing. While the current outlook may be optimistic, there is no guarantee that prices will continue to rise.
It is important for buyers to take into account the potential risks and long-term trends in the market before making any decisions. Ultimately, the supply and demand of the housing market will have a direct effect on the property market's performance.
Choosing Wisely When Making Property Investments
Investing in property can be an unpredictable journey, so it is important to choose wisely when making property investments. Market volatility and fluctuations need to be taken into account when assessing any potential property investment.
Property values can be influenced by various factors, such as location, amenities, and market demand, so it is important to consider long-term trends and potential risks. Property investment strategies should be tailored to the individual's financial goals and risk assessment in real estate must be considered.
While some properties may experience good capital gains, not every property will. It is important to look at the broader market and consider the potential for losses, as well as the chances of success.
Ultimately, choosing wisely when making property investments can help to maximize returns and minimize risks.
Factors Influencing Property Value
Though location is a major factor, other elements can influence the value of a property in Perth's market. These can include the local amenities, the current market demand, the rate of construction, and the supply and demand problem.
These factors can all have a large impact on the price of a property. For example, if the construction rate is low, then the supply of homes in an area is restricted, pushing up prices.
Additionally, the impact of location on property prices cannot be overstated, as areas with few local amenities are likely to see a decrease in median unit prices compared to more desirable areas. It is important to take into account all factors that could potentially influence the value of a property before making any buying or selling decisions.
Long-Term Trends and Potential Risks
Considering long-term trends and potential risks is key when investing in the Perth property market. Factors such as location, amenities, and market demand play an important role in determining the value of property.
Population growth is also a major factor, as it can put upward pressure on prices when supply fails to keep up with demand. The slow rate of construction in Perth is a further indication of this dynamic.
Fluctuations in the market can also be an issue, as some areas have seen a decrease in median unit prices compared to 2008. Investing wisely is essential to ensure that the property will appreciate in value over time.
Taking into account these factors and long-term trends is critical for making informed decisions in the Perth property market.
Advice for Buyers and Sellers
Buyers and sellers should always be mindful of the Perth property market's volatility and heed advice accordingly. With market fluctuations, buyers must weigh their preferences carefully and sellers should devise strategies to protect their investments.
It is important to research the area thoroughly, including the rate of construction and population growth. Prices may increase over time, but some properties may not experience good capital gains.
Thus, it is essential to consider long-term trends and potential risks. Loss-making properties, such as those in the Towers complex at Elizabeth Quay, should be avoided.
Overall, buyers should be wary of specific percentage forecasts and base their decisions on reliable data. With the right understanding and advice, buyers and sellers can make informed decisions and navigate the Perth property market confidently.
Conclusion
The Perth property market is a complex and unpredictable one, with various trends and risks that can influence the overall performance of the market. It is important for buyers and sellers to make informed decisions based on the current housing statistics, property value fluctuations, losses in specific areas, and market volatility.
By understanding the long-term trends, potential risks, and advice for buyers and sellers, investors can ensure they make the best decision when it comes to investing in the Perth property market.