Shift the focus

Being in the property market I’m obviously an avid follower of all the commentary and statistics released on the state of the market.

And to put it bluntly: it’s totally confusing and often seems to be a self-perpetuating cycle of either talking the housing market up or down at any point in time.

How does this constantly changing and conflicting commentary affect the buyers, sellers, investors and renters out there?

You may well ask.

So in this column my aim is to demystify the commentary and provide you with more useful information. After all, this is real estate in the 21st century where all of us have access to a wealth of information in real time, in fact, so much so, that it’s a virtual minefield to attempt to wade through.
What you need to know as a player, or potential player, is: where is the weather vane pointing at the moment and what does it mean for your own situation?

The good news is that positive sentiment is returning to the Perth housing market following the two cuts in official interest rates late last year and there are a heap of other positive fundamentals.
Evidence of this can be seen in the increase in rental and sales activity.

The combination of factors that led to the long period of inertia (and stagnation) in the Perth housing market is clearing and it’s well and truly time to shift the focus away from the negative, “GFC-inspired” commentary to a new dynamic.

According to the latest set of real estate indicators from REIWA, there was a 4.5 percent rise in the number of houses sold in the last quarter of 2011 and a 6.4 percent jump in the number of apartments sold. Average selling days dropped to 77 from 81 in the same period while at the same time, the number of properties on the market fell by 10 percent.

For renters, the market is tight and vacancy rates continued to slide. The vacancy rate has fallen to just 2.5 percent in Perth and the median rent has risen a further 1.3 percent to $400 a week.

So, what does this mean for the renter, the investor and those wanting to buy? What should you be doing?
Firstly be cautious about market generalisations as outcomes can vary from suburb to suburb and in different price ranges.

Accepting this:

• Investors should take note of the improved rental returns and assess the potential for property value growth
• Sellers should accept that price growth may not be dramatic in the short term and to have clarity about their selling expectations prior to going to market. Select an agent that has the right selling solutions
• Renters should secure longer tenancy terms to help manage any potential rental blow out
• Buyers should understand that real value is abundant in the market right now and to act before this period of opportunity passes

My best advice: don’t take on the clichés or outdated views so prevalent out there. Get involved in forums where there is informed, practical and incisive dialogue about the market.