The rise and fall of the Perth property market

“It’s gone from amazing growth and tripling in price from 2000 to 2014 to then losing at least 30 per cent of that number as well as losing a lot of cash flow in that same space, which is only just starting to turn a corner now,” Mr Glossop said.

“If you held onto it, you’re back to where you started. So that’s locking up your money for 16 years without anything,” host Phil Tarrant noted. 

Is the market growing?

During its peak, the Perth property market was the most expensive city in Australia, only for numerous economic factors seeing the market fall.

“Now it’s half the price of Sydney if you look at median price on freestanding houses. They saw a massive fallout of population growth of their economic position where they went from the number one state in the country to then basically being the seventh or eighth state in the country based on jobs creation, based on population growth, based on vacancy rates, based on unemployment data,” Mr Glossop said. 

Data released by CoreLogic in November showed that it was the first month of growth for Perth for a very long time in capital gains perspective. 

The third quarter of 2019 is the strongest rental growth market, with Perth at over 5 per cent. 

“So, if you look at a couple of those, probably more so, previous indicators which show where it’s come from and where it is now, we’re all of a sudden seeing that some of those key things as far as rental growth and then that leading into capital growth, which I don’t expect it to go shoot hockey stick, but we are in a position now where rents are getting very, very attractive,” Mr  Glossop said.

“Vacancy rates are getting lower by the day. There’s sub two and a half percent and getting better by the day in most markets now. 

“And then also on top of that, you’ve got some big infrastructure projects along some of the, both the transport infrastructure as well as healthcare as well as some of their major square developments etc and closer to the CBD, which now are leading towards jobs creation, unemployment dropping,” Mr Glossop explained. 

Determining the value of property?

Mr Glossop warned that determining the value of the Perth property market can be incredibly difficult due to the large changes the market has undergone.

“If you look at what is this property worth five years ago, I can guarantee that you’ll find properties every day of the week that show extremely good value based on that.”

“But then you have to look at what sold in the last three to six months. What are we looking at that sell within the last three to six months? And when a market starts to recover, you’re not necessarily looking at just the last three to six months. You’re kind of looking at what was this property worth in its peak.”

However, the buyer’s agent warned of the importance of supply and demand particularly in the Perth market.

“In addition to that, the attached markets, we’re just not touching. So, anything in the apartments, townhouses etc. There is more supply coming to that market, probably unnecessarily in Perth.”

“It’s the only market major city in the country right now, which still has actual positive signs as far as approval,” Mr Glossop concluded.

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