PROPERTY REPORT SEPTEMBER 2015
Contents State of the Property Market Market Statistics June Quarter 2015 Bespoke Finance Update
1 2/3 3
#bourkesgivesback 4 Sprinkler Winter Ban
State of the Property Market BY ALAN BOURKE Looking at the current listing numbers for our local market, we see that sales in the City of South Perth dropped in volumes by 30% on the December 2014 quarter and 40% on the March 2015 quarter. Traditionally we see a seasonal uplift in the first quarter, however, we generally don’t see such a slowing in the second quarter. This means that with Spring fast approaching, stock levels in Perth are very high. Typically, many owners hold off until Spring to put their house on the market. The weather is milder and gardens are at their prime. We expect to see listing stock rise even higher and in today’s market conditions, that means we push further into a buyer’s market with less sales happening across the board. The sales strategy must be to price your home very competitively, style it with furniture (if it’s empty) and spend the correct amount in advertising to ensure you get the best marketing reach. Our Bourkes Magazine gets distributed to 15,000 local homes and is a great, cost effective solution for many of our sellers. We have sold homes as far away as Coogee from our magazine. Slowing rental marketing Our property management department is also feeling the pain of a slowing Perth market, and the challenge for us is to secure tenants for our vacant properties. The Perth vacancy rate is currently at 4.7%, meaning that one in 20 properties is standing empty. Our dedicated Leasing Manager Marie is working hard opening 13 homes on a Saturday plus holding after hours viewings to get our properties leased as soon as possible. All the while Bourkes is pushing forward with some very exciting projects, one of which is our new website, which will be real game changer for our firm. It is mobile responsive, so will work well on iPhone and iPad, devices people often use to search for property. We have tried to make our website the best real estate website in Perth, why not visit www.bourkes.com.au to see the change?
4
Market Quarterly Statistics - MARCH QTR 2015 100
90 24%
27%
50%
51%
80
Quarterly sales in South Perth, Como, Kensington, Manning and Salter Point
70
60
50
Brackets 40
$0-$500k $500k-$1M
30
Percentages
$1M-$1.5M
20 20%
$1.5M-$2M
15%
10 5%
2%
0
$2M+
2%
4%
Quarter-Year
Mar-15
Jun - 15
* Total Sales
210*
131*
* Total Sales figures represent the No of sales for South Perth, Como, Kensington, Manning and Salter Point.
Perth Metro - Quarterly Sales 9000
100%
8000
80%
7000 6000
Down by 48% from March 2013
60%
5000 4000
40%
3000 2000
20%
1000
0% Jun -15
Mar -15
Dec -14
Sep -14
Jun -14
Mar -14
Dec -13
Sep -13
Jun -13
Mar -13
0
Perth Metro - Quarterly Stock 16000
80
14000 12000
57
10000
8261
8000
50
49
50
8797
8693
8664
59
57
55
10872
10068
12033
68
13676
71
13739
60
58
10372
50 40
6000
30
4000
20
2000
10
0 Jun -15
Mar -15
Dec -14
Sep -14
Jun -14
Mar -14
Dec -13
Sep -13
Jun -13
0
Mar -13
2
70
AVERAGE NUMBER OF DAYS LISTED
Perth/WA: Regional Snapshot
June Qtr 2015
March Qtr 2015
PRELIMINARY
REVISED
Median House Price, Perth
$530,000
$550,000
Median Unit/Apartment Price, Perth
$420,000
$440,000
Number of House Sales, WA
4,707
6,470
Number of Unit/Apartment Sales, WA
1,014
1,521
71 Days
68 Days
13,739
13,676
Vacancy Rate, Perth
4.7%
4.4%
Median Weekly Rent
$420
$430
Average Selling Days (Residential), Perth Properties For Sale (End of Qtr), Perth
Official Cash Interest Rate
2.25%
2.25%
BESPOKE FINANCE UPDATE
Australian Investment Lending Changes The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the Australian financial services industry and their role is to regulate the behaviour of, among other, lenders, banks and credit unions. In December 2014, APRA wrote to all deposit-taking institutions (such as banks and other lenders) setting out sound lending standards, particularly for investment lending, that included a benchmark for the 10% maximum growth of residential investment mortgages. This occurred because of concerns over the number of people entering the property investment market and the stability of lending for this market considering current economic conditions.
For finance advice call Chris Hazell from Bespoke Finance Group on 0403 527 440 or email chris@befg.com.au
APRA’s focus was on restricting high loan-to-value and high loan-to-income lending, which may be risky for consumers if there should be a rapid or sudden decline in housing values or the property market in general. Whilst these concerns are mainly based around the East Coast property market (in particular Melbourne and Sydney), any changes that the lenders of Australia make are enforced Australia wide as they set national policies, as opposed to regulating state to state. In response to APRA’s new lending standards, many lenders and financial institutions announced they would be changing their criteria for property investment lending in order to meet APRA’s requirements. Most major banks have announced that they will be cutting the discounts available on investment loans, which means that interest rates on new and existing investment loans could be slightly higher than interest rates on owner-occupied home loans. These changes are starting to take effect, with a number of lenders announcing changes during the last few weeks. Some examples of these changes are AMP (ceased all new investment lending and increased existing investor loans by .47%), ANZ & CBA (increased new and existing investment loans by .27%) and NAB (increasing existing variable rate interest only loans by .29%) If you have any questions or would like to discuss how these changes may impact upon your specific situation, please don’t hesitate to contact Bespoke Finance Group.
3
Company and Community
#bourkesgivesback Every year, the Salvation Army teams up with REInvest, REIWA’s community programme, for its Winter Appeal. This initiative collects swags, sleeping bags and other donations to help the homeless in Perth stay warm during winter. After a similar successful campaign last year, Bourkes were again nominated by REIWA as a dedicated collection point for sleeping bags. A call out to the community and a donation round in the office yielded a nice mountain of sleeping bags that was picked up and distributed early July. Our sincere thanks to everyone who supported the cause. We hope we were able to help a few people stay warm this winter.
Property Management Tips
1ST OF SEPTEMBER
Time to turn those sprinklers back on A reminder that the winter sprinkler ban is over as of the first of September, and that you can turn on your sprinklers again as per your watering days. To find out what your watering days are, please visit http://www.watercorporation.com.au or scan the QR code.
272 Canning Highway Como WA 6152 | 08 9474 2000 | bourkes.com.au FOLLOW BOURKES! Want to keep up to date with the Bourkes team and company promotions? /Bourkes.Property
/BourkesTV
/Bourkes