Professionals Arthur Johnston Snowball
256 York St Albany
(08) 9841 1777
(08) 9842 5818Contact us
With a distinct cooling in the mining sector, or if you prefer, the shift from construction to production, the real estate market in our capital city and those markets in the Pilbara have been impacted negatively this calendar year. Both sales and rentals have come off the boil, and in some sectors and regions, they have lost substantial ground.
This is contrary to what has been a very buoyant market on the Eastern Seaboard whilst the South Coast and Albany has been moving along in a steady and relatively positive fashion this year.
A sharp reduction in interstate migration to WA has clearly had a major impact on the Perth and Pilbara markets although according to the ABS there has been a lift in net overseas migration which has probably helped stabilise the rental market in recent months.
The latest CoreLogic RP Data statistics for November 2015, as reported in Your Investment Property reveal, “the average property price in Perth has fallen by 4.1% in the last 12 months. This is the biggest drop of any Australian capital in the last year, and as much as three-quarters of Perth suburbs are going backwards in value”. REIWA actually has the Perth median as for the September quarter at $522,133, an adjustment of 4.2 per cent on the revised June quarter median of $545,000, which is a pretty substantial drop in three months.
Looking at the regions, it’s a mixed bag with the aforementioned Pilbara suffering drops for the quarter of around 4% but the annual change is much worse with Port Headland losing 10.6% and Karratha 27.5%. Down here on the South Coast we seem to be benefitting from our isolation and lack of exposure to iron ore mining. Albany is basically steady for the quarter and up 2.8% for the year to the end of September. Longer term, Albany has seen little to no growth in prices over the last five years but an average of 5% annual growth over the last 10 years which takes into account the boom period of 2005 to 2007.
So as we approach the end of 2015, we ask – where to for 2016?
Crystal ball gazing obviously but Perth seems to be bottoming out, the East Coast markets are coming off their stellar run and the South Coast continues to be steady to slightly positive. Locally, a number of builders are noting the lack of new residential land coming onto the market and this may see a slight squeeze on blocks in estates such as Oyster Harbour. There is still a good supply of lifestyle or semi-rural blocks so it is difficult to see much improvement on this front next year. The level of out-of-town enquiry still remains strong, so we would expect quality homes that are well located and presented to remain in demand in 2016 and a good harvest could assist the higher end of the residential market. Positive signs for the redevelopment of The Esplanade site at Middleton Beach may see some investment and speculative interest push the already popular suburb slightly higher in price and increase interest in Albany more generally.
Overall, we feel we are in for another solid year. We don’t have the lack of stock or booming economy to suggest anything spectacular, but Albany has benefited from being in the spotlight a fair bit lately and our office is currently enjoying a sustained run of outstanding sales as we approach the end of the year. We are feel the outlook for 2016 is positive and Professionals Albany is looking forward to helping our clients make the most of their real estate assets in the New Year. We wish everyone a safe and happy Christmas and holiday season.