Western Australia Property Report
National Overview Upgraders seize opportunities The past 12 months have provided an abundance of opportunities for upgraders to climb the property ladder. Interest rates are at record lows, rising values have boosted home equity, and many Australians are trading up to larger homes or more desirable locations, or are achieving lifestyle aspirations such as moving to acreages or beachside locations. This quarter, Herron Todd White valuers around the nation identified those areas where upgraders are buying, and which locations can give buyers the best of both worlds decent capital growth and a quality lifestyle. PROXIMITY TO SCHOOLS AND FACILITIES IS A KEY DRIVER For many upgraders, the decision to move is based on meeting the needs of a growing family, and consequently, family-friendly suburbs have been the key beneficiaries of upgrader activity. Despite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks... In Brisbane upgraders are attracted to middle-ring suburbs like Grange, Newmarket, Ashgrove, Coorparoo and Camp Hill located 5-10 kilometres from the CBD. Here, family homes start in price at around $600,000. In Sydney, the Hills District offers ideal family living with quality homes and plentiful local facilities and as a bonus, capital growth is virtually assured with the construction of the Norwest rail line, due for completion in 2019. The same preference for family living is driving upgrader activity in Darwin. Notably, the northern suburbs of Nightcliff, Rapid Creek and Jingili offer larger homes on generous blocks with the extra appeal of quality local schools. In Tasmania, upgraders are heading to areas where character homes are available. Many of Hobart s inner suburbs such as Sandy Bay and Battery Point have benefited from this trend. 2
A CHANCE TO GET MORE BANG FOR THE UPGRADE BUCK Despite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks, and this is allowing upgraders to enjoy more bang for their buck. On Queensland s Gold Coast, for example, beachfront homes in Mermaid Beach are priced around $3 million a far cry from the price tags of up to $12 million seen in 2007. In Perth, the riverside suburb of Victoria Park is becoming a sought-after address among upgraders. Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth. INNER-CITY LIVING HOLDS APPEAL Reflecting the trend towards near-city living, inner-city suburbs are also attracting upgrader interest. In Melbourne, Fitzroy North offers a thriving cafe and restaurant scene, and as demand surges in neighbouring suburbs, capital growth in Fitzroy North is expected to be healthy over the long term. In Adelaide, Bowden is undergoing significant urban renewal and the gentrification of surrounding suburbs should also underpin growth in this area. With so many opportunities available to achieve your personal property goals, I invite would-be ugraders to take a look through our state-by-state reports to discover the suburbs of choice for other upgraders, plus a guide for what you can expect to pay for your next home. Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth. Brendon Hulcombe CEO - HERRON TODD WHITE 3
Western Australia Perth has seen an upswing in sales activity among upgrader buyers over the past 6-9 months, and reflecting this, industry figures show the median sale price for Perth housing is currently $540,000 a 4.9% increase over the previous 12 months. Nonetheless, preliminary figures for the current quarter suggest the market is beginning to cool from more heated conditions. The number of properties listed for sale is trending upwards, heading towards historical averages, and more balanced market conditions are anticipated for the remainder of 2014. With this in mind, let s look at some of the key Perth locations that will hold appeal for upgraders. THORNLIE AND CANNING VALE Thornlie and Canning Vale are established suburbs in the south-eastern corridor of Perth. With a variety of housing types and quality local facilities, these suburbs are regarded as traditional upgrade locations for first home owners particularly buyers trading up from the lower-priced areas of Gosnells, Kenwick, Maddington and Langford. Thornlie has experienced strong capital growth in recent years, with the median house price rising 14.4% over the past year far higher than the price growth of 5.7% experienced in Canning Vale over the same period. We believe Canning Vale and Thornlie should continue to perform well in terms of future capital growth, driven in part by ongoing demand from upgraders and local investors. New 2-bedroom apartments in Thornlie are priced at around $350,000; they are about $400,000 in Canning Vale. Villas are transacting for around $450,000 in Thornlie and up to $500,000 in Canning Vale. Prestige homes do not form part of the market in these localities. VICTORIA PARK Victoria Park is an established suburb separated from the Perth CBD by the Swan River. The suburb s Albany Highway cafe strip is undergoing gentrification, and as such Victoria Park is reinventing itself into a trendy and highly sought-after address. These factors are seeing Victoria Park become more popular with upgraders, and over the past 10 years capital growth averaging 8.3% annually has been achieved. Despite close proximity to the CBD, Victoria Park is relatively cheap compared to North Perth, West Perth and South Perth, and the potential for further capital growth is an additional attraction for upgraders. Two-bedroom apartments and townhouses in Victoria Park start at $550,000, with new 3-bedroom and 4-bedroom green title homes on lot sizes upwards of 600 square metres starting at $800,000. Prestige homes are priced in the order of $1.2 million. 4
EAST FREMANTLE AND MELVILLE East Fremantle and Melville are situated on the southern side of the Swan River to the east of Fremantle. Both are well-located suburbs with good local infrastructure yet prices here are more affordable than in the surrounding prestige suburbs of Applecross, Attadale and Mount Pleasant. As an added plus, many of the homes in East Fremantle and Melville offer opportunities to demolish existing older dwellings and build new homes. Over the past year, Melville has experienced property price growth of 9.3% compared to 12.4% in East Fremantle. At present, 2-bedroom apartments in the suburb are priced between $500,000 and $700,000, with standard 3-bedroom and 4-bedroom houses ranging in price from $850,000 in Melville to $1.15 million in East Fremantle. Prestige homes are priced between $1.3 million and $2 million. WEST BUSSELTON To the south of Perth, Busselton s key point of appeal is proximity to the ocean, and astute upgraders would be wise to look north of the Bussell Highway to the ocean-fronting suburbs such as West Busselton, Broadwater and Abbey. Given its proximity to the CBD, the section of West Busselton north of Bussell Highway is perhaps the most desirable choice among these locations. Along with the nearby ocean front, West Busselton also offers the convenience of modern amenities including the new Busselton Hospital. Lot sizes are generous around 700 square metres with larger land sizes available among the higher-quality homes located along Geographe Bay Road and the foreshore. Over the past 10 years, Busselton has experienced healthy price gains as new areas have opened up or been developed, and between 2004 and 2013 the median house price in West Busselton jumped from around $275,000 to $490,000. Over the past 10 years, Busselton has experienced healthy price gains as new areas have opened up or been developed, and between 2004 and 2013 the median house price in West Busselton jumped from around $275,000 to $490,000. At present, quality duplexes in the northern section of West Busselton are priced in the mid- to high $400,000s. The current median house price for areas north of the Bussell Highway is significantly higher, about $600,000 to $650,000. Prestige homes featuring ocean views can command prices of up to $2 million. SOUTH BUNBURY To Perth s south, the property market in Bunbury is more about proximity to the CBD than the beach, and in this respect South Bunbury ticks all the boxes. Lot sizes are generous, with some providing development potential, and the suburb offers a mix of older renovated houses and newer quality homes. The median house price in South Bunbury rose from $175,000 in 2004 to $340,000 in 2013. At present, high-quality duplexes are available in the low $400,000s, with 3-bedroom and 4-bedroom homes priced between $500,000 and $600,000. Prestige homes are priced from $800,000 to $900,000. 5
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