Phil's Property Corner
April Market Update
Thank you for your continued support as a referral partner with Candour Property Group. I have included my Monthly Market Update below.
Perth’s Median House Price has seen another improvement in March, recording a 0.5% increase to $517,650. You can see REIWA’s March Real Estate Update here, later in the update it shows that the Median Rental Price has remained steady and the Rental Vacancy Rate has maintained at 5.1%, the lowest in years.
It is widely expected that the lower Rental Vacancy Rates will begin to push up the Median Rental Price in the coming months and this increase should continue to make the Perth market more desirable for property investors around Australia. Our market is being keenly watched by investors on the east coast of Australia, especially given the weakness beginning to be demonstrated in Sydney and Melbourne property prices.
Land sales activity has also shown steady improvement over recent months as first home buyers take advantage of the $10,000 First Home Buyers Grant and investors enter the market. This has led the UDIA (Urban Development Institute of WA) to call the bottom of the market.
A trend that has been emerging in recent times is renters considering whether to purchase a house to live in, or purchase a house as an investment. The historical trend has been that people save up their deposit to buy a house to live in, confident that this house will double every 7-10 years. With the market unlikely to continue to deliver on this growth many people are starting to consider their options and explore whether they may be better off continuing to rent for a while longer and make their first purchase an investment property.
Clients who are considering these options are often very surprised when we explore the numbers with them. An example of this is a couple I met with a few weeks ago, they are currently renting and were looking to purchase a house to live in. We looked at their numbers, after purchasing a home to live in it would have taken approximately 6-8 years for them to pay the mortgage down sufficiently to be able to afford to purchase their first investment property.
We then compared that decision with continuing to rent for a while longer and purchasing an investment property. The numbers showed a very different story, having an investment property meant they were able to receive tax credits and rental income straight away and we could structure it so that these funds were used to make significant reductions to the investment loan on their property investment. Their investment become increasingly cash-flow positive as the loan on it decreased, meaning that when they do purchase their home to live in they are able to use this passive income to pay off their home loan a lot faster than possible using only their own disposable income.
If you would like to know more the first step is to have a chat with Phil Bertram who can book in an appointment for you to find out how this works for you. There is no obligation to proceed any further and he doesn’t charge for his time.
To arrange for him to call you please email him with your name and contact number on email@example.com and he’ll be in touch. Or contact him directly on 0477 228 803.
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You can find all previous Market Updates here.