Panic Buying Hits Home in Perth!!

…So screamed the headline in last weekend’s Australian Financial Review.
Unlike a lot of the stuff you read in the press about the property market, most of which is written to generate either fear or greed, this one is true.

Two years ago there were over 18,000 properties on the market in Perth.

As of last weekend there were 8,400 properties on the market according to the Real Estate Institute of WA.

Last week alone 1029 properties sold, which is an increase of 40% on the same time last year.

How come the sudden surge in buyer activity? Well, it’s not so sudden. I have been saying for over 12 months now that if the number of properties on the market continued to decline and interest rates continued to fall then inevitably something would have to give.

That ‘something’ gave in January of this year as first home buyers piled into the market in droves closely followed by investors.

Since the boom of 2006, which saw the median price increase by 42% in less than a year, Perth has experienced the slowest growth of all the capital cities.

According to Landgate turnover between 2006 and 2011 fell by 40% as buyers, burnt by the boom quietly waited for the inevitable price drop before returning to the market.

Property prices fell by up to 20% in some areas; it wasn’t pretty.

A great many real estate agents left the industry between 2008 and 2011 in what has been described by some old timers as the worst market for over 30 years.

Well, it seems we have gone full circle and the buyers are back in town.

I’ve heard of people paying significantly over the asking price just to get into the market and agents presenting multiple offers to sellers who previously couldn’t attract a sniff of interest.

Where is it all headed you may ask?

According to respected valuer and real estate expert Gavin Hegney of Hegney Property Group, values in Perth could rise by between 8% and 15 % this year.

I sincerely hope we don’t see anther boom of the likes of 2006 because it distorts the market which then takes time to recover.

At the same time if I were a first home buyer I would be buying sooner rather than later.

Be careful of borrowing too much as interest rates will start to rise again in 2014. That’s where some people get burnt and are forced to sell because they can’t afford the mortgage repayments.

Buy the best you can afford, the dream home can come later.

Happy Days!

Bernie Kroczek

I would be really interested in your thoughts or queries. Please feel free to comment here.

About Bernie Kroczek

Bernie Kroczek has been in real estate for over 26 years. He prides himself on offering an alternative to the usual way of doing real estate. He also likes to offer plenty of free information to help people make the best decision when buying or selling property.

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