How the west has won out
WHILE MOST Australian property speculation stays focused on the eastern state capitals of Melbourne, Sydney and, more recently, Brisbane, astute investors are tuning into what is happening in the west.
Western Australia is the standout performer in the country's property market, with Perth experiencing an almost 24 per cent increase in house prices in the 12 months to March.
According to the Real Estate Institute of Western Australia (Reiwa), Perth has leapfrogged Brisbane in terms of property values. If the pace of growth continues, Perth is likely to soon surpass Melbourne and Canberra, putting the city behind only Sydney in the race to claim the most expensive real estate in Australia.
Those who spotted the trend and were brave enough to act have done very nicely. Perth's median house prices have more than doubled in five years, and continue to grow. Figures for the March quarter show an increase of 5.1 per cent over the December quarter, setting a new median price for a Perth city home at A$353,000 ($2.05 million), up A$17,000 from the December quarter. All market indicators point to equally impressive June figures, industry experts say.
And it is not just metro Perth that is causing joy. The increase was higher in regional Western Australia, at 26.4 per cent, said Reiwa vice-president Rob Druitt.
The good news for landlords continues. Median rents in the metropolitan area have grown by 30 per cent in a year to A$230 per week, while vacancy rates hover around a low 1.4 per cent.
Mr Druitt said demand was still outstripping supply, and properties were typically selling within 18 days, down from 48 days a year ago.
Houses were frequently selling above asking price, Mr Druitt added. 'It's at the point where many agents don't list a price, but simply call to express interest.'
Mr Druitt said market price pressure was also sustaining interest in units and apartments. 'The median price for a unit in Perth is now A$275,000, up by 22.2 per cent over the year.'
The sudden charge west comes as no surprise to West Australians, who have long treasured their state's laid-back lifestyle, climate and the hitherto inexpensive real estate. Perth's population is growing at about 500 per week, driven by the resources boom and job seekers from the east coast.
Much of the market is investor-driven, but the pickings are slim. Listings were at an all-time low, Reiwa said - down from about 14,000 properties in a 'normal' market to just 4,000 now.
This has put pressure on residential land prices - up 32 per cent in a year - while January broke the record for building approvals.
With the market so hot and prices continuing to rise by an estimated A$1,000 a week, picking a 'best buy' is difficult. According to Reiwa, houses and land in general anywhere along the coast are doing well, as are the traditionally undervalued outer urban areas of Kwinana, Armadale and Midland. Regional coastal cities such as Bunbury, Geraldton, Busselton, Dunsborough and Mandurah (the fastest growing city in Australia) are also doing exceptionally well.
Reiwa expected figures for the June quarter to show the property market still growing strongly, and likely to break through the A$400,000 median metro barrier some time this year.
In metro Perth, top performing suburbs in the year to March 2006 included:
In regional areas the top performers were: