Last week on Real Estate Talk we did a whip around Australia with nine experts giving their take on the national property market.
We’ve already covered the Queensland and Tasmanian markets in Part 1, the Melbourne and A.C.T. property markets in Part 2 and N.S.W and S.A. yesterday in Part 3.
Today’s transcripts are from my interview with Damian Collins and Jorgan Hucent about the Western Australian and Northern Territorial market:
Kevin: Let’s move across to the west now. We’ll have a look at the West Australian market firstly and we’ll then take you up into the northern territory. Firstly, I’m talking to Damian Collins from Momentum Wealth in Perth.
It looks like that Perth market may have just slowed downed a little bit, Damian?
Damian: It has, Kevin. We’ve seen a bit more stock come onto the market.
We’re at about 10,800 thereabouts – it varies week to week. So, getting back towards what we consider a balanced market.
In 2013, we saw some reasonable growth in the Perth market. In 2014, the growth rate has started to slow down, so it’s bouncing along at what I would consider generally a fairly balanced market. So not oversupplied overall certainly, but not undersupplied either.
Kevin: RP Data telling us the median house price is about $530,000 but the median unit price – $440,000 – has seen a fairly good increase year on year, too.
Do you think that’s to do with affordability?
Damian: Certainly what we’ve seen is there are a lot of incentives for first-time buyers.
The market – particularly in the last 18 months – has been very much first-time buyer driven.
The first-time buyers – particularly if they’re buying brand new – get $10,000 from the state government, no stamp duty. For established buyers, they have really pared back those incentives for people who buy established properties.
It definitely has been very much a bottom-up driven market. I haven’t seen what we’ve seen in Sydney, where it’s been a lot of investors in the market. We’ve seen just a moderate amount of investors.
It’s certainly been that lower end of the market where it’s all been driven. Yeah, that’s certainly why you’ve seen some of those prices in that lower end move up.
Kevin: Damian, you mentioned that you’ve seen a slowdown in listings, but this is a good listing time. Are you expecting more listings to come onto the market?
Damian: I think traditionally – like a lot of cities around Australia – we do start to see some stock come on after spring. I won’t expect to see it in September, but certainly we’ll see it in October/November.
But also at the same time, you do get more buyers coming into the market so you get more competition, as well.
Look, my philosophy is you buy when the time is right and you sell when the time is right. Trying to time the market, because everyone else has got the same opinion, you end just bringing your property on when everyone else is doing the same thing. We will see more stock, but conversely, we’ll also see more buyers come in to the market as well.
Kevin: Damian, where do you think investors can get the best bang for buck right now in WA?
Damian: We’ve been really targeting properties that have a rezoning potential or development potential longer term – so areas that we’ve earmarked and identified it as being either likely to be rezoned or are going through that rezoning process.
Even though the market overall is quiet – I don’t expect to see massive amounts of capital growth in the Perth market – overall, in the next 12 months, we still expect those sort of opportunities to generate pretty solid returns as more and more investors start to look for properties they can add value to, and certainly with the zoning changes going on that’s where we’re targeting.
I think that’s where investors will make some pretty good money in the next 12 months.
Kevin: Damian Collins from Momentum Wealth, thanks very much for your time.
Damian: Thanks, Kevin.
Kevin: Okay, the final state that we’re visiting today in the show is the Northern Territory, and this time, I’m talking to Korgan Hucent from Ray White in Darwin.
Korgan, what’s the most popular sector for investors right now in the Darwin market?
Korgan: It’s a bit of a mixed bag at the moment.
The rental yields right now for houses and also units overall in Darwin is sitting very close to 5.5% between houses and units. Certainly, the northern suburbs – in terms of houses – seems to be a better performing area, I think, in the market right now.
Kevin: What’s the most popular price range?
Korgan: Anything right now, when we’re referring to the northern suburbs, is around the $580,000 to $600,000 mark.
Kevin: What am I getting for $600,000 in those areas?
Korgan: Three bedrooms, one bathroom, it might have some modifications or renovations to either the bathroom or kitchen – it’s all very entry-level basic type properties. Certainly to find something more modern and new, you would certainly need a little more than $600,000.
Kevin: Korgan, we’ve seen some spectacular growth out of the Northern Territory in recent years, but in more recent times we’re getting reports of a bit of a slowdown. Are you seeing that?
Korgan: Certainly, certain segments of the market are definitely performing better than others right now. Interestingly enough, we’ve seen units overall filling proportionately higher in a percentage basis to houses at the moment.
In fact, we probably had some of our best traded months in the last six to eight weeks. I have to say we’re certainly not seeing or experiencing that on the ground and out in the marketplace.
Kevin: Is there any indication the market might be turning with multiple offers or more or less people coming to inspections?
Korgan: Clearance rates at auction have dipped a little bit, which is obviously a pretty common indicator of how the market is performing and traveling. Value dipped a little bit since the start of the year. What we’ve seen in terms of the average state of the market is it’s still been relatively stable.
The marketplace has hit the floor from our perspective, and what we foresee in the following six to twelve months, we believe to be relatively stable.
Kevin: So you’re predicting a stable market for the next 12 months in Darwin?
Korgan: Most certainly. I think there’s a lot of optimism and still a lot of confidence in the marketplace.
Those yields that I mentioned before, I think they’re pretty conservative, and right now, an investor in the marketplace – depending on obviously where and what location and property type – there are some areas of the market that are bringing back north of 6%, up to 7% in some instances, for strong two- or three-year rental guarantees – properties that are associated with the gas project and also with the Defence Housing Authority.
Kevin: If you would like to know a bit more about the Northern Territory market, certainly give Korgan a call – Korgan Hucent at Ray White Darwin. Korgan, thanks for your time.
Korgan: Thanks, Kevin. Talk to you soon.
Catch up on previous transcripts on the links below but make sure to stay tuned for my interview tomorrow with Dr Andrew Wilson.
Listen to the full show at RealEstateTalk.com.au and while you’re there subscribe and receive our weekly podcast (or the transcripts) where I interview Australia’s leading property experts.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.