The end of 2013 saw a median house price of $535,000 for the Perth housing market. This is a record high. With growth as high as 8% projected for 2014, every successive quarter for 2014 could see another record high.
With changes in the First Home Owner Grant (FHOG) producing two spikes, the first on established homes and the second on new homes, the median had been pulled down from $525,000 in the June quarter to $510,000 for the September quarter. Since the FHOG will now remain at its current level of $3,000 for established homes and $10,000 for new homes, we see the first home buyer market levelling off to more traditional levels.
Construction of new homes has added more inventory to the market. This has brought rental rates down approximately 2% to an average of $460 per week, with apartments at $450 and houses at $470.
How Sellers can Profit
If you are planning on selling an investment property anytime soon, you can’t really go wrong. Since the median price is already at a record high, you have in all probability made money. With the Perth property market projected a 8% growth while the economy is only projected to grow 2%-2.5%, your properties should continue to outperform inflation.
You may have to watch out for troughs or times when the market may be inactive but you really can’t lose with property right now.
How Buyers can Profit
Buyers can profit from the record low interest rate. With the RBA interest rate at an all-time low, lenders have decided to pass much of the savings to the mortgage market. While home prices are at a record high, they won’t be getting lower anytime soon. That means that the sooner you buy a home, the less it is going to cost.
For investors, it will be easier to achieve neutral or positive gearing with an interest-only loan with interest at an all-time low. With many fixed-rate mortgages going as low as those with variable rates, now is the time to lock in a low rate for up to five years.
Call 0408 912 244 to learn more.