Perth has the best conditions in the nation for first-time buyers with an average of just three years and seven months needed to save the deposit for an entry-level home, according to a recently released report.
First-home buyers have been purchasing in rising numbers over the past year, taking advantage of low interest rates, increased savings, tax cuts and federal and state government incentives. Actually saving a lump sum deposit can be a challenge amid rising living costs, low wage growth, weak saving rates and rapidly rising property prices. But Perth first home buyers are the most fortunate in the country, with the quickest time to market.
The report defined entry-level homes as the 25th price percentile of the market, and assumed a dual income as well as a 20% deposit to avoid mortgage insurance. Previously, Darwin had the shortest time to save a deposit, but Perth now comes in one month faster.
Additionally, the federal government’s First Home Loan Deposit Scheme allows a first-home buyer to secure a home loan with as little as a 5% deposit without incurring the added cost of mortgage insurance. The clear advantage of this scheme is access to the property market sooner, as it shaves years off of the time it takes to save for an entry-priced deposit. Perth is again the winner with this scheme, recording the quickest time to save at only 10 months.
Buyers could be feeling a sense of urgency at the moment, conscious that while prices still remain below peak levels, it’s not going to take much for them to surpass those previous peaks. Additionally, recent research revealed that most Australians find advertised price guides unreliable when purchasing a property. The important thing for all home buyers is not to panic buy. More properties will come on the market, so don’t rush into a decision you will soon regret. The expert advice we provide at Resolve Property Solutions enables our clients to act quickly on the right property.
Perth Suburbs Moving Up
Parkwood saw the biggest growth in June, increasing 4.8% to $450,000, followed by Booragoon with a 4.1% increase to $825,000. Merriwa and Quinns Rock both rose 3.9% to $335,000 and $499,000 respectively. Joondalup also made the top five for June, with 3.2% growth to $525,500. Subiaco and Nedlands were also strong performers
The number of properties listed for sale decreased 1% from May to June. But compared to three months ago, listings for sale have increased 8.1%, which is encouraging news for buyers.
Overall, the Perth sales market slowed slightly in June, however it is still performing well and competition among buyers remains high. Experts agree that the Perth market recovery will continue.
Australia’s Property Values Finished the Financial Year on a High
National home values rose 1.9% in June, taking annual growth to 13.5% for the financial year. This is the highest annual rate of growth seen across the Australian residential property market since April 2004. However, performance is starting to ease notably in some markets.
There were plenty of demand-side factors driving housing market growth through the first half of 2021. For instance, in May, unemployment dropped to 5.1%, and the underutilisation rate fell to 12.5%, it’s lowest level since February 2013. Elevated savings accumulated through COVID-restrictions last year, along with strong consumer confidence and continued low mortgage rates have encouraged more buyers into the housing market.
The monthly change in Australian home values of 1.9% sits well above the decade average (which is 0.4%). While Perth home values for June increased by only 0.2%, the cumulative growth over the first six months of the year of 7% is substantial. Also of note is that in the last financial year, home values in Perth increased 9.8%.
The smaller growth rate for June is not surprising, given we have entered the traditional winter slowdown. What is encouraging is that despite the cooler weather and slight easing of sales activity, Perth still recorded price growth. This places Perth in a good position as we move out of winter and into the spring selling season over the coming months.
Outlook for Perth
With winter well and truly set in, stock levels are seasonally low. Buyer activity hasn’t subsided though, large numbers of people are still attending home opens and multiple offers are being received on accurately priced properties. Good properties are selling quick and generally after just one home open.
The outlook for houses in the inner city and middle ring suburbs is that demand will stay strong, while supply levels remain low. Demand for property has been largely driven by owner occupiers and first home buyers. We are also experiencing a large volume of people returning or relocating to Perth from the eastern states and overseas.
Investor activity is starting to increase, with high yields as well as current vacancy rates being below 1% making Perth an attractive location to invest. Eastern states investor activity and enquiries are increasing. As the Perth market continues to show signs of strength and constant growth, we expect investor confidence to increase going forward.
Finding the right property in this market is challenging and competitive. You need an expert on your side to help you and increase your chances of securing your property.
Resolve Property Solutions is an independent and qualified Buyer’s Agent specialising in Perth property. We will work hard for you to help your search, negotiate and secure your property goals at the best possible price.
Our story started with the passion for property and the research behind finding the right one.