Perth Property

Reporter: Andrea Burns

It's common sense - what goes up, must come down. But if you've bought a house in the past three months that lesson's just cost you about ten thousand dollars. Property investment expert Gavin Hegney says where the average price of a Perth home topped four-hundred-and-ninety-five-thousand dollars last November, by March that had dropped to four-hundred-and-eighty-five-thousand. "Compared to august last year we've had probably 3 times the number of properties available for sale which is flowing onto watered down price growth and price levels"

Just as we saw with bananas when Cyclone Larry wiped them out, a lack of supply pushes prices up. And it's the same with houses. Last year, Perth's booming economy meant speculators from the east were keen to buy up local housing stock. Less stock meant we were paying a bomb for houses, just like we had for bananas when there weren't many around. Now, more homes have been built and the wise men with their bags of cash have gone back east again to invest - so lower demand means our prices are dropping.

"At most I think it'll come back to something it was around June last year" Residex chief John Edwards says the average price could drop to four hundred and sixty thousand dollars by Christmas, in some cases, that's as much as a 10% drop. "But you have to remember that in the last 6 months houses rose in value by much more than that so what we're really talking about is nobody really losing anything, we're talking about values just basically being flat for about 9-10 months of this current year"

But some suburbs bucked the trend. Well, the experts will always tell you access to public transport is a big selling point, and the progress of the Mandurah train line is obviously having an impact south.

These were the top performing suburbs...


Source - Residex

Baldivis - up close to six per cent, the average price nudging the half million. Next, Waikiki, Secret Harbour - average price almost five hundred and forty thousand, but growth at five and a half per cent. Greenfields, Eskine, Leda, Medina, Singleton, Pinjarra and Wellard all reporting healthy increases. And Gavin Hegney says, they remain a good purchase. "You can buy a substantial home within 500m of the beach, for under the median house price of Perth, in a developing area - to me, that's good buying"


Source - Residex

The worst performers in terms of capital growth include Koondoola - average price just over three hundred thousand, Balga, Hocking, Mirrabooka, then Girrawheen, Ballajura, Embleton, Wanneroo, Stoneville and Noranda - where the average price was well over half a million dollars, but the growth was down. John says "there'll be some bargains out there right now, watch for the bargains, pay the right price"








On the other hand, country properties have gone up - on average, around thirteen thousand dollars. If you've been promising yourself that sea change or tree-change , moving to suburbs of Albany, Boddington, Denmark, Bunbury, Broome, Kalgoorlie and Boulder could prove profitable.

john says "you've still got growth happening in country areas and that'll happen for a little while yet" Where things could get really interesting is in the rental market. We've already had a taste of it with tenants bidding for properties, property analysts say price hikes should be expected.

Gavin says "people moving in to the state say I believe your prices are high, but gee your rents are cheap, I think I'll rent and that purchasing pressure has gone into the rental market, pushing rents up quite substantially I think 2007 will be the year of the rental rise" Our experts say even if your place has decreased in value, don't panic. Think of the drop as a chance to catch your breath. "Anyone looking to buy a home today kick the tyres, have a look around, don't be afraid to negotiate, put an offer in, what you think is good value, take your time and buy well"

Their tips.. if you're financially stretched, maybe it's time to refinance - or even sell assets that aren't performing as well as they should. Do spend money improving the home - better presentation translates to dollars when you do put it on the market.

What should I do now?



Sell non-performers

Home improvements

John says "property investment is the lowest risk investment that there is at the end of the day and it will grow again, it will show you a good rate of return so hang in there"