Perth Property Update – May 2019 – Tim Whall
Perth Property Market as we see it. May 2019.
I cannot believe this week sees us rolling into June and almost the end of another financial year.
Wow what a week it’s been! we have successfully leased 8 properties in 7 days and there has been a clear increase in enquiry, private viewings, & attendance across all our sales listings.
A magnificent feeling for our office, and sentiment shared amongst my colleagues in the industry.
Thankfully some positive news these past few weeks for the property market.
One of the key factors to our slow property market has been access to lending, this past fortnight we have seen some good news on this front.
The state government introduced a targeted housing stimulus, to assist the local WA housing market.
This initiative will help potential first homeowners by temporarily relaxing Keystart criteria to allow more people into the scheme.
Keystart’s existing income limits will increase by $15,000 for singles and couples and by $20,000 for families from July 1, 2019 to December 31, 2019, giving more people access to loans. The income limits will revert to the current levels from January 1, 2020.
First Home Loan Deposit Scheme.
A federal initiative and proposed scheme that would mean first home buyers will fast-track their ability to get into the property market by reducing the percentage they will have to save for.
Commencing Jan 2020 – It will enable first home buyers to access a mortgage with a 5 per cent deposit.
The Australian Prudential Regulation Authority’s (APRA) plans to reduce the seven per cent floor on serviceability calculations for residential mortgages, instead allowing banks to assess loans at 2.5 per cent above current rates.
I believe if these changes are implemented it would be a huge win for the sales market, allowing homes loans to be more accessible.
APRA is undertaking a four-week consultation period, closing on 18 June 2019, before hopefully releasing the updated guidelines.
In the weeks leading up to the recent election concern surrounding the policies Labor where proposing which could have negatively affected the already struggling property market.
Buyers confidence, specifically investors, was extremely low and non-committal, the market felt like it had literally ground to a halt for the past 4 to 6 weeks.
Since the election all our team have experienced a massive up take in enquiry and attendance for all our listings.
Since October 2018 our rental department has experienced, overall, a far more positive upswing compared to same periods on the previous year.
That being said, it is still a “patchy” at times with April being the quietest month in 10 months.
Properties are leasing quicker, and we have been able to start increasing some rents on a select few properties which offer very desirable, scarce, accommodation in key locations, however across the portfolio rental rates are yet to see significant increase as supply, from time to time, can still outweigh demand. We expect this to subside further favoring rental rates around spring/summer 2019.
In general, confidence has certainly restored to the rental market with solid 6 months of relative stability along with showing some light for a potential longer lasting improved environment for all our owners.