PROPERTY REPORT MARCH 2016
Contents State of the Property Market Market Statistics Dec QTR 2015 Bespoke Finance Update
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#bourkesgivesback 4 Property Management Tips
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State of the Property Market BY ALAN BOURKE Having recently attended an Australian Property Institute Annual Seminar on the real estate market in 2015 and 2016, here are the facts: Sales volumes* are down from the 2013 peak of 11,200 to 6,200 (per qtr) in December 2015 (*Houses & Units down 45%). The 2013 peak was a result of 3 years of strong migration to Perth (averaging approximately 80,000 people pa). Once the resources boom slowed, our migration has dropped to approximately 50,000 pa in 2015 and volumes have dropped accordingly. This year, net migration is expected to be only 5,000! The alarming statistic is the number of vacant listings currently available. In 2010, there were approximately 1,500 rented properties available. In December 2015, we see 10,000 vacant! Perth vacancy rate is 6%. The highest ever recorded. So where is the bottom? This year is the answer. Whether its mid or late 2016, the panel all believe 2016 will see it bottom out. So it’s the time to buy! As J.P. Getty said – “buy when everyone else is selling!” It’s the perfect time to trade up in the market and will also be a good time to build.
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MARKET QUARTERLY STATISTICS - DECEMBER QTR 2015 100
90 29%
22%
80
Quarterly sales in South Perth, Como, Kensington, Manning and Salter Point
70
60 53%
50
47%
Brackets
40
$0-$500k $500k-$1M
30
Percentages
$1M-$1.5M
20
$1.5M-$2M
18%
20%
10
$2M+
3% 2% 2%
4%
Quarter-Year
Sep-15
Dec-15
* Total Sales
196*
165*
0
* Total Sales figures represent the No of sales for South Perth, Como, Kensington, Manning and Salter Point.
PERTH METRO - QUARTERLY SALES
Dec -15
Sep -15
Jun -15
Mar -15
Dec -14
Sep -14
Jun -14
Mar -14
Dec -13
Jun -13
Sep -13
NO. OF HOUSE SALES
Mar -13
9000 8000 7000 6000 5000 4000 3000 2000 1000 0
PERTH METRO - QUARTERLY STOCK
57 50 8261
8797
50 10068
49 8693
55 10872
59 12033 58
57
13676
68
71 15122 13739
14500
62
64
70 60 50
10372
40
8664
30 20 10
Dec -15
Sep -15
Jun -15
Mar -15
Dec -14
Sep -14
Jun -14
Mar -14
Dec -13
Sep -13
0
Jun -13
2
80
Mar -13
16000 14000 12000 10000 8000 6000 4000 2000 0
AVERAGE NUMBER OF DAYS LISTED
Perth/WA: Regional Snapshot
December Qtr 2015
September Qtr 2015
PRELIMINARY
Median House Price, Perth
$525,000
Down 5.4% on Dec 2014
Median Unit/Apartment Price, Perth
$434,500
$430,000
Number of House Sales, WA
5,100
Down 15% on Sept Qtr
Number of Unit/Apartment Sales, WA
1,200
Down 8% on Sept Qtr
59 Days
56 Days
14,500
12,500
Vacancy Rate, Perth
6%
5.6%
Median Weekly Rent
$400
$460
Official Cash Interest Rate
2.0%
2.25%
Average Selling Days (Residential), Perth Properties For Sale (End of Qtr), Perth
BESPOKE FINANCE UPDATE
Australian Investment Lending Changes The last quarter of 2015 saw the first home loan standard variable rate (SVR) increase from the banks of Australia since 2011. Whilst there was an increase in the standard variable rate for investment loans earlier in 2015 as a response to the new regulations imposed on lenders by Australian Prudential Regulation Authority’s (APRA), this was the first time rates had been lifted across the board and impacted on home owners and investors alike. Interest rates increased between .15% - .20% and a vast majority of lending institutions raised their rates during this period. Importantly, these rate increases were completed outside of the standard RBA cycle, the RBA has not shifted the cash rate since the May 2015 when they dropped the cash rate by 0.25%. This highlights two key points; the lenders of Australia are taking further steps to respond to APRA’s new capital requirements, which are based on strengthening the Australian banking system and that
the banking institutions are willing to move outside of the RBA’s guidelines, something not seen in 5 years. These changes set the tone for a contentious 2016; with cash rate already at a record low 2.00% and the possibility of another RBA cash rate decrease on the horizon, will the banks of Australia follow the RBA’s lead and decrease rates further, or do their recent actions show a willingness to act outside the RBA’s guidance? With interest rates currently at record low levels and fixed and variable rates on offer from 3.99% the question needs to be asked; is there enough room for the lenders of Australia to pass on further reductions after increasing rates at the end of 2015 to help cover the cost of the new government regulations? Despite the recent rate increases, the lenders of Australia are as eager as ever to win new clients, with record low home loan rates, refinance rebates, First Home
Owners Grant incentives and fee waivers being promoted to differentiate and attract new business. Given the amount of competition in the market, there has never been a better time to review your existing lending and ensure your loan facilities are still competitive. To learn more about the current offers and how they may apply to your situation please don’t hesitate to contact Bespoke Finance Group.
For finance advice call Chris Hazell from Bespoke Finance Group on 0403 527 440 or email chris@befg.com.au
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COMPANY AND COMMUNITY
#bourkesgivesback Every year, the Salvation Army teams up with REInvest, REIWA’s community programme, for its Christmas Appeal. This initiative collects toys and food to help the homeless in Perth celebrate Christmas. The successful campaign was kick-started beautifully by our bright and bubbly team here at Bourkes. Our sincere thanks to everyone who donated and dropped off toys and food for the Christmas appeal. Another of our Bourkes initiatives is to donate blood on a regular basis to the Perth Red Cross Blood Donor appear. The Bourkes team has already visited the Red Cross twice in the last quarter and plan to keep this up during 2016.
PROPERTY MANAGEMENT TIPS
Compliance for home security On 1st July 2013, Changes to the Residential Tenancies Act 1987(the Act) and the Residential Tenancies Regulations 1989 began. The changes include a list of the locks and devices that must be installed in rental premises to make them reasonably secure. Department of Commerce have made changes to the Act and have advised us that your property must comply with these new requirements. Main entry door – Deadlock; or a key lockable security screen door that complies with AS 5039-2008. All other external doors – Deadlock; or if a deadlock cannot be installed, a patio bolt; or a key lockable security screen door that complies with AS 50939 – 2008. Windows – Windows need to be fitted with a lock, whether or not a key lock, that prevents the window from being opened from outside the premises.
External Lighting – An electrical light at, or near the main entry that is capable of illuminating the main entry to the premises and is operable from the inside. Curtain and the blind cord Landlords need to ensure that blind/curtain cords and chains meet the national product safety requirements. We at Bourkes see the importance of this and have therefore come together with a company who specialise in the above.
Joe’s Mobile Locksmith has put together a package for Bourkes at the cost of $66 per inspection. This inspection will include arranging access with tenants, inspecting all areas mentioned above and producing a certificate once compliant. Please see their inspection checklist attached. Should your property not comply, a quote will be provided for your consideration. They will arrange for the necessary works to be completed and produce compliance certificate once finalised. Please see link below for more information; http://www.commerce.wa.gov.au/sites/default/files/atoms/files/minimumsecurityrta.pdf
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