Categories
Market Update

Perth Property Market Update – June 2022

Australia has seen many changes in the past month. A new Labour government was voted into power on 21 May 2022, and the RBA raised the cash rate to its highest level in decades with an increase of 50 basis points to 0.85%.

In this update, I look at Labour’s five-point housing and economic plan and what it means for homeowners. Lastly, I explore Perth’s property market predictions for the coming months with an emphasis on rising cash rates likely to continue well into 2023. 

Watch the Perth Market update in 58 seconds including why this winter could be the ideal time to sell and the really easy way that Buyers can get ahead in this market.

For a more detailed market update, please see below.

Share market in decline

The recent rise in inflation has seen the RBA hike cash rates to higher than expected levels. Global market shares are dropping since consumers face price increases from every direction while growing concerns of a recession due to geopolitical unrest.

So, what does this mean for Perth’s housing market?  

Last week, REIWA members reported 869 property sales in Perth, a decline of 12.8% from the previous week. This is due to an 11% drop in home sales, a 17% drop in unit sales, and a 16.8% drop in vacant land sales.

While federal elections have historically slowed activity as consumers wait for the results, numerous interest rate hikes are on the horizon, which also appears to be affecting buyer attitudes.

Conditions have changed since 2021. REIWA reports that housing sales have decreased steadily from December 2021 to May 2022. However, unlike large cities on the east coast, Perth is still experiencing growth. 

Perth is currently the most affordable state capital, with a median dwelling value of $555,500, making it attractive for buyers. Although there is a decline in owner-occupier demand, investors with new funds and equity may look to acquire properties and benefit from low vacancy rates and rental price growth. 

Although further rate hikes are expected, Perth’s housing market should see moderate growth over the next while.

The Labour government’s proposed housing and economic policy 

Australia’s new federal treasurer, Jim Chalmers, warns of tough times ahead as he notes the previous government, led by Scott Morrison, has left him in a dire situation. 

“There are elements of strong demand, tight labour market, there are some pleasing aspects of the national accounts, but there are far more troubling aspects in our economy,” said Chalmers.

That being said, more social housing was promised by Labour, as well as a strategy of helping 10,000 Australians each year through a 40 percent equity contribution.

Both policies can potentially increase demand in a housing market that is already oversaturated. However, recent data suggests that Australia’s housing boom may be about to an end, with national prices dipping in May for the first time since 2020, as higher interest rates put pressure on buyers.

ANZ chief economist, Shane Oliver, notes that Australia’s property market is “highly sensitive” to changes in the monetary cycle due to high debt to income ratios. 

Maintaining economic growth amid rising global tensions and inflation while addressing calls for higher spending from freshly appointed lawmakers will be difficult for the incoming government.

Perth property predictions for July 2022

Bloomberg reports that 79% of economists predict a further rise of 50 basis points in July, which sets the cash rate at 1.35%. This should come as no surprise following a 75 basis point hike by the United States Federal Reserve on 16 June 2022. 

The rise in cash rate indicates a further slow in growth in July for Perth’s property market.

Concluding thoughts

Haus Exchange will continue to assess the economy’s performance and bring you regular updates on how it affects the Perth property market.

If you’re considering buying a property, I advise you to make sure your finances are in order so that you can move quickly to avoid rising interest rates. 

Categories
Selling

Should you sell before you buy or buy before you sell?

Similar to the chicken and egg scenario, one of the greatest conundrums when transacting property is: do you sell before you buy or buy before you sell?

There’s a few points to consider if you’re in the market for a new home, especially if you are considering the subject to sale option.

Finances

Depending on your financial capacity, buying a property before you sell your existing home is a good position to be in. It gives you the option to search for something that meets all of your needs without any time pressures.

But for most of us, this scenario is uncommon. There’s not many who have the financial ability to stump up for two mortgages at the same time, so it’s important to crunch the numbers before you take the plunge and make an offer on your dream home.

Subject to sale

One way to buy before you sell without having to simultaneously fund two mortgages is to include a “subject to sale” clause in your offer. While this can be a solution, there are some underlying issues that mean a “subject to sale” clause might not be all it’s cracked up to be.

For example, you can’t be absolutely sure how long it will take to sell your home so there’s going to be an element of uncertainty if you’re traversing this path.

It’s also possible for the seller to instate a 48-hour clause, which means that the vendor can continue to market the property and stage home opens as if your offer is not even on the table. If the vendor receives an offer from another buyer, they are well within their rights to accept it but will give you a period of 48 hours to make your offer unconditional.

Alternative approaches can be especially enticing if they’re a cash offer, even if it’s of a lesser value as it may be perceived to be less of a risk than an offer that relies on sign-off for a new loan.

Get your ducks in a row

It’s widely accepted that the best process is to list and sell your existing home before you make an offer on a new abode. That way, you’re not overextending yourself or adding to what can already be a stressful situation.

Ensure your finances meet your expectations for your dream home. Take the time to speak with you mortgage broker or bank about how much you owe on your existing home, what equity you have and how much you can borrow.

Research real estate agents and speak to some trusted realtors to get an idea about how much your property is worth in the current market. It’s also worth conducing your own inquiries about the prices of similar properties are fetching in your neighbourhood.

What if I sell before a buy?

There are a few things to consider if your home gets snapped up before you find a new property.

  • Request a long settlement. Usually, settlement periods are between 21 to 28 days once finance is unconditionally approved. But it’s worth trying to negotiate a longer settlement if you don’t have a new place to call home
  • Is it possible to rent your home back? If you’re hopeful of becoming a tenant in your own home, include a condition on the offer and acceptance agreement for the buyer to consider.
  • It might not be an ideal situation but you might want to consider moving in with family or friends or to a rental property as a short-term solution until you find the next home you want to purchase. It might be an opportunity to pay no or minimal rent and save more towards your next bricks and mortar investment.

Additional costs

As well as fees and commissions paid to a real estate agent for marketing and selling your home, it’s important to be aware of any additional costs that you may be presented with during the process.

If you are looking to sell an investment property, you will need to consider capital gains tax.  You will also be expected to pay stamp duty and settlement fees on your new home. And depending on how much you are looking to invest in marketing your existing home for sale, there may be extra maintenance or property staging costs to pay for to ensure the property looks its best when it’s put on the market.

How is your property value tracking in this shifting market?

Why guess when you can just ask us for a Digital Appraisal of your home or investment property. If it’s been on your mind, but you haven’t had the chance to arrange an appraisal or you would prefer to let your tenants have their privacy, this is your chance to stay informed without the hassle. 

Simply get in touch with the property address and a brief description so that I can send you an estimated value based on similar homes sale over the past 12 months.

This report costs nothing and is totally obligation-free, so why wait? Simply get in touch and I will send you the report including market research and comparative market sales within 24 hours.

Categories
Market Update

The Perth Property Market – May 2022

– Why buyers and sellers alike are missing out.

We have just been through some fantastic times if you own a property. Property prices have gone up by 1.1% in April alone and REIWA is expecting a 10% growth across the 2022 calendar year. However, you now have banks like Westpac, who don’t think that we are going to see any growth for the rest of the year. So who is right?

For my take on the Perth property market in 70 seconds view my video update below.

My prediction is that we are going to be steady for the rest of the year.

It might go up a little bit. It might go down a little bit but it’ll be remain reasonably steady. So in other words it’s going to be the same as what we have now, at least for the short term. And the reason for that is that we hardly have any properties for sale. We are probably about 30% under what we usually have for sale with a balanced market. Furthermore, the rental market is really really tight with a vacancy rate of about 1.1 – 1.2%. A balanced market is around the 2.5-3%.

Where are the buyers coming from?

On top of that, investors from interstate are still very keen on our property market because Perth is the most affordable capital city right now. We also have first home buyers who do not want to pay the high rents that they’re paying already and building from new is now really difficult with ongoing price increases and delays.

Then there is the recent interest rate increase. If you’ve followed the RBA change and the media reporting in the past couple of days it’s all probably doom and gloom usually because that gets peoples attention and it therefore sells advertising. However, we will get interest rate rises again this year. There’s no doubt about it. You can just look at what just happening in the US increasing their rates from 3% to 5% in the past 6 months.

As such, I do believe that 2022 is the last year we’re going to see any growth in Perth market. I expect that the brakes are going to come on towards the end of the year and will likely see a negative growth for next year which is supported by Westpac who are expecting a 6% drop for 2023. However, it will not be as bad as what you’ll see in Sydney and Melbourne. Also, remember when you’re reading the media updates that they’re reporting mainly on Sydney and Melbourne market conditions, not Perth. We are not the centre of the universe by far according to the national media. We are probably the opposite.

So that means in a nutshell that it’s going to stay roughly the same this year.

Why buyers and sellers alike are missing out. 

Talking to buyers every day, what I am constantly hearing, is so many of them have the same story to share. They keep missing out on properties because they simply don’t know what price to offer. The lack of transparency is extremely frustrating for the buyers and sellers are also missing out as they are not receiving the best possible price for their property. I’m really struggling to understand why transparency is not happening because it is so easy to address.

The good thing is my clients automatically receive that transparency as it is a standard service that we offer which means that we get some fantastic results for our clients.

Would you like to know what your Perth property (home or investment) is worth?

Whether for planning, financial management, an additional mortgage or just peace of mind, decisions made with anything less than the facts can lead you to make choices that may not be in your best interests.

Simply click here to learn more

Categories
Selling

Should I sell my investment property with or without tenants?

Finding the right answer will be a delicate balancing act for any investor and one that requires significant consideration well before you erect the ‘for sale’ sign.

For some, how to sell an investment property will relate to cash flow so it’s likely your decision will largely be based on whether you can afford to have it vacant while it’s on the market and you wait for settlement.

Retaining the tenant

The most attractive reason for retaining tenants while the property is for sale is that you will be able to keep earning rental income. This will remove some of the time pressure and hopefully enable a higher price.

But be aware that if the tenant is on a periodic lease, they may decide to vacate at short notice and this could cause upheaval during the marketing period.

Selling while a tenant has occupancy can also throw up a few challenges, particularly when it comes to access and presentation.

Access to the property can become an issue depending on the tenants you have. For example, if the tenant is a shift worker and sleeps during the day it may not be possible to show prospective buyers through during daylight hours.

While tenants are required to provide agents with ‘reasonable access’ to a property that is for sale, some can be uncooperative and difficult.

In addition, presenting the property in a clean, welcoming state is important. Sometimes a tenant’s clutter, pungent cooking smells or the two bedrooms jam-packed full of Star Wars collectables or their 30-year teddy bear collection might not help to present the property at its best.

Having a tenant will also mean you have little to no control over presentation of the property, especially if the renters’ standards are not in line with your expectations.

Some tenants keep rental properties in pristine condition and invest considerable time and effort cleaning and tending to the gardens. But others, particularly share houses, can leave a lot to be desired when it comes to presentation.

It’s also worth remembering that even if tenants are helpful and generally tidy, their furniture and personal belongings may not showcase the property at its full potential.

Selling your investment without a tenant

Marketing a vacant home may make the property appear less welcoming, so there’s a good argument for having an expert “stage” or “style” the property with the right furniture and furnishings that makes the most of the space.

“Quite often after a property has been tenanted for a while it needs a bit of TLC, but the downside is that you’re not going to have a rental income for three or four months so cash flow could be an issue,” said The Haus Exchange proprietor Rasmus Nielsen.

“At The Haus Exchange, we understand that primo presentation can ultimately result in a higher sales price and that’s why we offer a complimentary styling service for new listings.

“The Haus Concierge service is an exclusive offering where we can arrange a staging consultation, organise quotes and coordinate the experts to make sure the property looks its best from the first day it hits the market.”

How is your property value tracking in this shifting market?

Why guess when you can just ask us for a Digital Appraisal of your home or investment property. If it’s been on your mind, but you haven’t had the chance to arrange an appraisal or you would prefer to let your tenants have their privacy, this is your chance to stay informed without the hassle. 

Simply get in touch with the property address and a brief description so that I can send you an estimated value based on similar homes sale over the past 12 months.

This report costs nothing and is totally obligation-free, so why wait? Simply get in touch and I will send you the report including market research and comparative market sales within 24 hours.

These articles may also be of interest to you

Categories
Market Update Selling

It is a crazy market. What is the value of your Perth property in 2022?

HAPPY NEW YEAR! I hope you had a chance to relax and recharge over the Christmas/New year break!

The challenges in 2021

During 2021, we experienced some challenges including preparing a home for sale that was left vacant for nearly 2 years due to covid. With the help of our trusted trades contacts, the home came up like new and sold for a fantastic price with a very happy vendor as a result.

The Haus Exchange has prepared, staged and sold more homes and investment properties in 2021 thanks to your support and we have increased our staging capacity for 2022 as the flow of repeat clients and referrals increase.

In 2021 we have sold in more than 13 suburbs with sales prices ranging from the $300k range all the way up to mid $2 million range helping 62 buyers and sellers making a move.

What you can expect from 2022.

2022 has barely started but already buyers are thick on the ground and property prices are strong.

Over the past few months, we have seen a big increase in buyer demand and strong levels of buyer confidence.

To help our valued clients keep up to date with the current market, we are offering a market update so you can discover the NEW 2022 value of your property. It’s complementary and part of the service we offer our loyal clients.

What will you receive?

  • We will assess the current market value of your property
  • You will discover the NEW 2022 value of your property
  • We will supply a detailed market report of properties sold in your immediate area over the past three months.

REIWA is expecting that the Perth property market is in for an 10% increase in 2022 and in fact, we’re finding many of our clients are surprised when they discover the NEW value of their property.

If you would like to know the NEW 2022 value of your property, please get in contact with me on 0466 725 866 to arrange a time.

Categories
Selling

3 tips on how to generate more interest for your Perth property from interstate buyers.

Lately, at the Haus Exchange we have experienced a significant increase in the number of enquiries from interstate.

As a result, we have sold a number of properties to buyers who never actually personally inspected the property at all.

For instance, for one property located at 14 Velvetene Rd, out of the 9 registered buyers, 4 have not inspected the property, with

  • 2 buyers from NSW,
  • 1 from Tasmania,
  • as well as a buyer from regional WA .

In this quick 1 minute video I am sharing my top 3 tips on how you can generate more interest for your Perth property from interstate buyers, who would be looking at buying your property, sight unseen.

For more tips and the latest updates, please connect with us on Instagram and Facebook

Related tips on how to sell your Perth property:

Categories
Selling

How Carl added $47,105 to his sales price

It is incredibly important in this booming market to have the right sales strategy to ensure that you sell at a premium price.

This simple, yet highly effective approach ensures that you don’t undersell your own home in a hot market.

As a result, Carl increased his sales price by a massive $47,105 from what he was willing to accept when he recently sold with The Haus Exchange.

Click on the video below to learn more

However, that was not all as Carl also took advantage of the Haus Exchange Concierge service to prepare and stage his empty home fo sale.

This is what Carl had to say:

“Fantastic agent. Even though I never purchased a property from Rasmus he kept in touch for 4 years so when it’s my time to sell i knew he was the man.

Never had to chase from day 1, updates so frequently i knew exactly whats going on throughout the process.

Tricky property to sell, Rasmus helped navigate through all the issues.

Achieved end results far beyond the reserve. If you want a honest, professional, approachable, diligent, hardworking agent, Rasmus is the man for you. Couldn’t sing enough praises. 10 stars”

You may also like:

What is The Haus Concierge?

Why do some properties sell for more?

How much does it really cost to stage your home for sale?

How much is my property worth in this changing market?

Categories
Buying Our Haus Selling

Where there’s a will, there’s a way and the team at the Haus Exchange always find a way!

Additional challenges pop up with more interstate and overseas investors wanting to buy into the Perth market without being able to view the properties in person. 

A Sydney investor was keen to take a look at this property the other day  and so this video tour was created just for this investor by the Haus Exchange. We then had a Facetime meeting so the investor could make an informed decision.

Currently, we now have 3 registered bidders on this property and none of the bidders have inspected the property in person. 

Instead, we have sold them all on this property by virtual means and a proven process that has generated fantastic results for our clients even before the local property boom! 

Categories
Selling

Why Perth property owners are selling themselves short despite selling in a booming market.

This is a very common mistake that both agents and vendors are making in Perth right now. 

The good news is that there is a really easy fix. However, if you don’t get it right, this mistake could cost you. 

In the past month, my clients have managed to sell their properties for an additional $35,000 – $60,000 just by using this easy fix.

To learn more, get in touch on 0466 725 866 or check out my tips below.

Categories
Uncategorised

How much extra will this home sell for?

Timing is everything and in the past 3 months my clients have experienced great results selling their properties for up to $50,000 more than expected. 
With the reserve already met, tune in and watch how much above reserve Alex and Miranda will sell their home for. 

To watch as an observer, simply click on the link below.

Watch here