LOOK ON THE BRIGHT SIDE

It’s no secret that the Perth real estate market is no longer booming. Naturally, everyone is constantly trying to pick that silver bullet that will fix everything and make the tough times go away. Many were hoping an interest rate cut was the answer, unfortunately it’s not that simple.

But let me put things into perspective. Sure the market is not an easy place but the news isn’t all bad. If you’re a buyer, the news is actually quite good. The market is full of choice and affordability has made a come back. The cost of money is starting to drop as indicated by the first cut in interest rates and buyers have the time to make informed decisions. Put simply, right now there is an abundance of opportunity out there for buyers. The challenge for buyers maybe the availability of loan funds although the Federal Governments $4 billion initiative last week will greatly assist funds liquidity for housing.

We are truly witnessing a buyers market and to be honest, it is probably about time they had a fair go and actually good for market fundamentals. Boom time pushed the Australian Dream further and further from the reach of many people and while Perth is by no means a ‘cheap’ place to buy, prices have corrected and there is value to be had. I see this continuing well into 2009.

However like all things, this buyer friendly market won’t last forever. The fact is this is simply a normal part of the property cycle and in time things will again turn in favour of the sellers, it’s the way the cycle works. World economic factors may distort and prolong the cycle timing but it will re-align itself.

While things are not going to dramatically change in the near future, Perth is poised for change. The following factors indicate that a strengthening of the market is on the horizon.

1) The dropping of interest rates is always the first trigger – the first sign of the ‘curve’ in the property cycle.

2) Demand for housing continues to accumulate as people move into the state looking to capitalise on the employment opportunities.

3) Another key factor is employment, all signs point to continued employment growth in WA. Security of employment encourages buying confidence.

If you understand the property cycle, you will understand that what we are going through now is completely normal and somewhat predictable. Trust me, I have been in this industry for a long time and I have seen it all before.