Major boost expected for WA
The falling Australian dollar will give a major boost to the Western Australian property market by making homes even more affordable for overseas buyers.
Blogger: Rory O'Rourke, O’Rourke Realty Investments
Western Australia has the fastest population growth rate in Australia with overseas migrants accounting for over half of this growth rate.
More than 1,000 people are moving to Western Australia from overseas every week and these migrants play a key role in the local property market.
Because of the very strong Australian dollar over the last few years, many new migrants have decided to rent rather than buy. This trend has seen the Perth vacancy drop to near record low levels.
However, with the Australian dollar now declining in value, these migrants will now find Perth properties more affordable and as a result overseas migrants will become more active the real estate sales market during the coming year.
In addition, Australians who are working overseas should also start to purchasing Perth homes in greater numbers moving forward as their local currency strengthens against the Australian dollar.
Areas in Perth that should benefit from this trend include the northern coastal strip where migrants have historically played a major role in property market. For example, in the local government area of Stirling, the latest Census figures shows that nearly 50% of residents have both parents born overseas. In Joondalup, the Census showed that some 60% of residents had both parents born overseas.
Recently arrived overseas migrants should consider the following matters when buying a property in Perth:
- Location, location, location drives property prices in Perth and in other part of WA. Properties which are close to the ocean, city or river in Perth, for example, have historically achieved the highest capital growth rates because of the growing focus on lifestyle.
- A good source of information on the historic capital growth rates of areas in WA is the REWIA website at www. reiwa.com.au. The REIWA website contains a large amount of free information for members of the public.
- It is a good idea to rent in the area you would live to purchase a home. If you take out a lease for six months, this will give you enough time to find out if this is the area you would like to live and also give you time to research the local property market.
- If you find the location you want to live and the price range you can afford, then register your name with some of the larger real estate companies in the area. They will notify you of a suitable property as soon as it becomes available.
- Properties that have easy access to shops, schools and local transport are easier to sell at a later date.
- Traffic can be an issue because homes that are located in busy roads tend to have a lower resale value than a similar home on a quiet street in the same area.
- Check of all of the costs when buying a property because factors such as stamp duty can be much higher compared to other countries.
- It is a good idea to have pre-approval finance in place because this will ensure that you in a much better position to negotiate the price of the home and immediately secure a property which is within your price range.
- Air conditioning: Many people underestimate the cost of air-conditioning, so if you want air conditioning, it is better, and probably cheaper, to buy a property that already has air conditioning installed.
- Swimming pool: Some families, especially those with young children, buy an established home with a view to installing a swimming pool at a later stage. However, if you can find a home for a competitive price with a pool already installed, it may be that you have a lot less hassle and the resale value might be the same as a home without a pool.
- Bore: Check if the property has a bore. A bore will save money in water charges over the longer term and help ensure that the gardens are properly maintained, especially during the summer months. Don’t forget, if you buy a home on a corner block you may have a bit more maintaining to do with your garden.
