We all know that the Perth housing market has been in decline for many years now.
According to CoreLogic, property prices today are at a similar level to a decade ago and about 18% below the recent peak in mid 2014.
For a number of months we have been stating that all of the leading indicators are showing that we are close to the bottom of the market and 2019 will be the year we see some much needed stability.
Following this stability will come a period of solid growth, most likely from 2020.
The big question is, what does this mean for investors?
The first thing to understand is that we never know when we have hit the bottom of the market until it is behind us.
It is only once data shows a steady improvement that we know the bottom has been hit, and we are on an upward trend.
So while Perth may not be at the bottom of the cycle right now, we believe it is very close and investors should be looking to position themselves for the next buying cycle.
Buying while markets are still weak and an element of fear remains in the market essentially provides counter-cyclical investors with the best buying opportunities.
In their recent report 'Perth Residential: Ripe for Investment', JLL outlined 6 key reasons why now is the right time for investors to position themselves for the next market upswing:
- WA's economy should bounce, with further improvements in the labour market and increasing population growth.
- Perth house prices are affordable relative to other markets and likely under-valued.
- New supply levels have slowed significantly and further declines are expected in the short term.
- The Perth rental market has made significant improvements over the past year.
- Demand for prestige properties in Perth remains robust
- Medium-term sentiment is upbeat
When you factor in the time it takes to complete a development project, starting now will see your product hit the market at just the right time.
If you would like some help assessing or finding a property to develop, give us a call on (08) 9240 6020 or hit the enquire now button at the top of this page.