Short-stay regulation reaches common ground

A survey conducted by WA Apartment Advocacy of short-stay property owners and their neighbours over the last two months, has found a genuine desire from both groups, for short-stay regulation.

The survey of 130 parties (of which 21% were short-stay owners) found that 60% of owners were concerned about factors like short-stay guests holding parties, excessive noise (70%) and guests being disrespectful (56%).

The neighbours of these short-stay properties also echoed these concerns, and in addition, that guests might not abide by council by-laws (66%).

As such, 42% of the short stay owners and 70% of the neighbours (affected by these properties) agreed that the WA short-stay sector should be regulated.

Ms Reece, Director of WA Apartment Advocacy believes that short-stay accommodation needs to be addressed in strata by-laws as a mandatory condition.

“If you do not have a by-law for short-stay in your development then you are open to potential issues with no means of recourse,” Ms Reece said.

“With 65% of buyers in the WA market being owner-occupier, it is important that the development sector is more proactive in relation to inserting by-laws that prevent short-stay, or otherwise ensure that the buyers are aware that no such by-law exists.

“Most buyers are wanting a private lifestyle and the intrusion of short-stay can detract from that.”

But Ms Reece also warned Council of Owners (COO) against introducing by-laws that were overly restrictive.

“I saw a recent by-law which prohibited any occupancy less than three months.  This means that if someone was going away and wanted a relative to house-sit, and it was less than three months, then this resident would be in breach of the by-law,” Ms Reece said.

“COOs need to be clear what it is that they wish to restrict before creating associated by-laws and I would strongly advise they gain legal advice in advance.”

The research also found that 30% of the neighbours had made a complaint about a short-stay property, with 67% reporting to the strata manager, 43% to the local council and 29% to the owner.

Ms Reece stated that while disruption was welcome in the property sector, there was also a need to protect the interests of buyers.

“It is appropriate to provide all the details about a property and its occupancy so that buyers can make informed decisions. This degree of transparency would be a good move for the property sector overall.”

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Numbers demonstrate correlation between top schools and property prices

Research released this week from analyst firm PropertyESP once again reinforces the impact of preferred public high schools on surrounding property values.

Analysing property sales for the past two years in the catchments surrounding Churchlands, Applecross SHS and Shenton College, the company found that price differentials could range from anywhere between $40,000-$150,000 depending on the school boundaries.

“For those living in the Floreat area if you fell in the Shenton College catchment, then the median house price was $1.135 million, in comparison – still within Floreat, if you fell into the Churchlands catchment, then the median house price was $1.295 million,” Ms Reece, Director of PropertyESP stated.

“Karrinyup is the same, with those with properties in the Carine catchment having a median house price of $850,000 while within the Churchlands catchment the median house price is upward of a million.”

When looking at Alfred Cove which offers both Applecross and Melville SHS options, again the houses in the Applecross catchment reflected a median price of $975,000 compared to Melville with a median price point of $900,000.

And in Winthrop, those houses located in the Applecross catchment attracted a median price point of $930,000 compared to the Melville catchment at $805,000.

Ms Reece concluded by saying that the three schools ranked in the top six of the State Government High Schools and for good reason.

“The ATAR scores for these schools are very high and so they do attract a reputation for being among the best and as a consequence are highly sought after,” Ms Reece said.

“And when you see the ratio of students attending Government High Schools, compared to private and independent schools in some of these suburbs, you will see up to 65% in favour of the public system.

“Therefore as we lead into the end of the school year and commencement of 2019, PropertyESP predicts there will be a flurry of sales in these locations, as families relocate for the senior high school years.”

The Channel 9 News story can be viewed by clicking here.

For more information log onto www.propertyesp.com.au

 

When numbers are misleading

When the new month rolls around, there’s a rush to comment on housing values and sales activity.

However we at PropertyESP have decided to outline why calling the market, a few days post month, can sometimes be somewhat rash.

Case in point, we recently took a look at Maylands sales for the month of May 2018 – reported as settled as of 30 June 2018. As can we seen – you would have been led to believe that there were 2 house sales and 3 unit sales.

Maylands sales 1 may 2018

But if in fact, you had decided to wait until 10th September to report on the settled sales for Maylands enacted in May, the data would be substantially different with 9 house sales (not 2) and 11 unit sales (not 3).  Furthermore average sales has risen for a house from $547,500 to $630,000 and fallen from $320,000 to $315,000 for a unit.

Maylands sales May 2018

Looking at settled house sales for May as at the end of each month from June 2018.

maylands sales 2 may 2018

And unit sales over the same period.

maylands sales 3 may 2018

So why do you have this variation in price between properties in suburbs within such a short time frame?  Because the median price depends on what is being sold – so if a number of one-bedroom flats are sold, then the median price will naturally be lower.  And the same for the sale of premium 4 bedroom homes, with regards to inflating the median price.

Data can change the entire forecast for an area – and that is why you have to make sure you are looking at the entire picture!

At PropertyESP we always like to look at the nitty gritty and longer term – plus we only report on WA.  And that is what makes us unique! Call Sam today on 0452 067 117 to talk property and see what we can reveal for your suburbs!

Strata survey shows satisfaction with fees

Research conducted with 150 apartment owners this month by the WA Apartment Advocacy has shown that 69% believe that the strata fees they are paying represents good value for money.

The respondents to the survey were from a wide range of demographics with annual salaries ranging from under $40,000 right through to over $130,000 and with apartments located from Kwinana Beach right through to Hillarys and as far East as Armadale.

Typically those with higher incomes were paying over $1000 per quarter in strata fees, with the bulk (39%) paying between $500-$1000/quarter.

Ms Reece Director of WAAA stated that interestingly it wasn’t until residents were paying over $500 per quarter did they start to have amenities in their development such as a swimming pool, gym and entertaining precincts.

“What the research demonstrated was that while 48% were happy with paying the current strata fees, 48% would prefer to pay less and as a result have less amenity,” Ms Reece said.

“Our state wide research conducted in 2017 verified that only 30% of residents were utilising amenities such as a pool or gym in their apartment development.

“However an additional 20% enjoyed knowing it was there, even though they were not accessing the facilities.

“It is important that when people are considering an apartment and the associated strata fees, that they are realistic about what amenities they are going to use and the frequency of use, before they commit.”

But as Ms Reece stated, most people did not look at strata fees in comparison to maintaining a home.

“Our research has shown that when you are considering the costs associated with a home’s maintenance and insurance, maintaining a pool, paying for gym membership and the like, in most instances the fees associated with strata management are more cost effective than owning a traditional home,” Ms Reece said.

“I am sure if you were to add up all the Bunnings receipts over a year you would be surprised and shocked about the expense and time it takes to maintain your average home.

“At the end of the day strata fees should be seen as an investment in order to maintain your asset so that it represents well at the point of resale and consequently buyers need to think of the long term when reflecting on strata fees.”

If you found this research interesting than maybe we can help uncover something unique about your projects?  If you would like to talk further than contact Samantha Reece on 0452 067 117.

 

700 is the magic number (Part 2)

Following on from our previous post re Colin Keane’s land report, we will now explore what is happening across Perth’s corridors.

At present there are 165 active estates in Perth achieving an average of 3 sales per month.  At our peak in the mining boom this rate was 8 sales per estate.  We are currently selling at 17% capacity and again at our peak we performed at 60% capacity.  And we will need to see 1300 sales/month before we will see prices improve (which is double the 700 that Colin Keane is suggesting we should be aiming for).

The North East corridor is the best performing sub market with 25% of all activity across Perth.  There is currently 129 lots sold per month but it ideally should be selling 175 lots and as such is 26% below capacity.  At present, capacity is in line with target and hence when the market returns to normal, this will be the first sub market to perform well.

27 july 2018

North West Perth represents 20% of the market share and this is linked to its proximity to the coast. Its monthly target is 140 sales and this corridor is currently achieving 89 sales pcm.  On this basis this corridor is performing 36% below target.  However unlike the North East, this market is 159% oversupplied.

27 july 1 2018

South West (Baldivis) also represents 25% of the market share. With 120 sales pcm and a target of 175 sales/month this corridor is performing 31% below target. This area however is the worst oversupplied with 302% excess capacity (currently 1257 lots on the market).

27 july 2 2018

The South East sector also represents 25% of the market share and 102 sales pcm and a target of 175 sales per month. Performing 42% below capacity, this market is also reflecting 242% excess capacity with 625 lots on the market.  This area is also overvalued by $7000 on land prices.

27 July 3 2018

And finally Peel represents 5% of the market share with 21 sales pcm and a target of 35 sales per month.  Performing 40% below capacity, this area has 324 lots on the market and hence representing 463% excess capacity.  Land in this corridor is also $20,000 overpriced.

27 July 4 2018

It is quite evident that if we can attract the 1000 people per month than this will have a significant influence on the health of our land sales and this is now our crucial focus.

While Colin stated we didn’t have to worry about overseas net migration, what we do need to do is cut our interstate migration by 50% (from 3000 people moving to the East to 1500) and this would have the desired effect we need.

But until we reach that target of 1000 people per month, the Perth land market will continue to face challenges and more so in the South West and Peel regions.  If you hold land in these areas, then you need to be considering innovative marketing strategies to stand out from the competition.  The good news is that PropertyESP is renowned for our marketing prowess, so contact Sam today on 0452 067 117 and we will troubleshoot your sales!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

700 is the magic number for Perth

A recent presentation by land guru Colin Keane, has shown that Perth could achieve optimal sales with just a few tweaks to market conditions.

There is no doubt that population growth is a major key to changing the dynamics of the Perth land market and as Colin stated, all we need is 1000 additional people per month in our state to allow us to achieve the optimal target of 700 land sales per month. And the good news is, we are already on our way, with Perth the only state to have grown nationally from overseas migration in the last 12 months with 16% uptake.

Currently selling 420 lots per month, Perth’s median price point of $224,000 is certainly the cheapest when you consider our other cities including Sydney ($468,000), Melbourne ($330,000) and South East QLD ($263,000). It is also interesting to note that Perth’s land prices are undervalued by approximately $6000 while Sydney is overpriced by $70,000 and Melbourne $42,000.

However when also considering Perth in contrast to our counterparts and our median lot size, we appear to be the smallest nationally with our median size 375sqm in contrast to Melbourne (400sqm), Sydney (447sqm) and SEQLD (436sqm).  And it is this sameness that is also depressing our market to a certain extent.  Variety after all is the spice of life!

For every 100 people employed in Perth we are assured 45 land sales and again this contrasts starkly to the East with the ratio in NSW 14:100 and Victoria 24:100.  However as Colin stated, if you consider Geelong which is the 2nd largest land market in the nation, the majority of its land sales growth has not necessarily come from employment, with this centre also reflecting an unemployment rate which is 18% above the state.

As Colin stated, of the extra 1000 people per month in WA, we only need 40% employed and the remaining 60% just need to choose Perth as their preferred home.  And with WA creating employment growth 30% above the forecast, all we need to do is become experts in tourism marketing!

As we see it at PropertyESP, Perth needs to start promoting our good news about mining investment ($64 billion committed), our affordable pricing and our great lifestyle and the rest will take care of itself!

We can certainly be the creators of our own destiny and this is very reassuring – because with a concerted effort we can achieve the magical number of 700 land sales per month!

If you like the proactive way that PropertyESP thinks – then you should chat to our team about how we can catalyst your sales with our marketing prowess.  Call Sam on 0452 067 117 for an insightful chat!

Apartment research shows interesting trends

 

National online real estate company REA just recently released some results based on research that they conducted on a national level with 12,618 apartment buyers (of which there were 415 respondents – on par with a poll).

PropertyESP has reviewed this information, from a marketing perspective, which is one of our key areas of strength.

Firstly, what was very interesting to note, was the increase in WA owner occupier buyers in the apartment market since 2015, which grew from 41% to 60% in 2017.

When considering the mix of apartments in any development, it is imperative to consider your local demographic profile and even undertake research in the marketplace to understand what this market is seeking.  We have known many developers to be stuck with one bedroom apartments, while the three bedrooms sold first.  While one bedrooms may give a higher yield – this is only the case, if they in fact sell!

30% of these buyers were also considering townhouses in conjunction with apartments with the intent of reducing the amount of maintenance time, as would be expected, from a traditional home.  As such apartment developers don’t just face competition from other apartment developments – but other small housing options as well, such as townhouses.

The research indicated that the time of conversion to sale was approximately 4.5 months.  43% of the buyers were also reading something related to property on a daily basis and hence this tends to demonstrate that regular social media posts/e-news are able to assist with promoting your project in this realm.  This is especially so if you need to nurture buyers over a 4.5 month period.

Buyers were interested in market insights, advice about buying off the plan and apartment designs and amenities in the property related literature.

When asked what were the benefits of buying off the plan, respondents indicated:

  • Locking in current market price (49%)
  • Modern features (47%)
  • Brand new – no one has lived there (45%)
  • Cost savings (45%)
  • Customised finishes (45%)
  • Flexibility to choose floor plan (40%)

However what restricted their decision to buy off the plan included:

  • Unexpected costs/going over budget
  • Funding the purchase
  • The stress of construction
  • Not knowing what to expect

When asked what influenced the purchase of their apartment, respondents indicated:

  • Price (62%)
  • Location (49%)
  • Developer’s reputation (48%)
  • Access to public transport (46%)

When asked what amenities buyers were looking for, respondents indicated:

  • Storage in the car park (64%)
  • Fully equipped gym (42%)
  • Outdoor entertaining spaces (42%)

74% indicated that some kind of incentive influenced their purchasing decision, with 62% indicating a preference for the developer to pay stamp duty, 58% stating free upgrades and 45% a rental guarantee period.  However this is not always the case and we have witnessed projects in Perth, which have in fact put up their prices in the last six months.  In contrast some areas are oversupplied and hence incentives are a sales tool to generate traction with some buyers.  Again it is on a suburb by suburb analysis.

What was also interesting to note was how buyers evaluate a developer’s reputation.  54% quoted the developers track record with previous projects, 40% indicated a long history in the market and 30% positive word of mouth.  On that basis companies need to be mindful of not just marketing their projects but also their company brand.  It all ties in together.

If you are, like us, excited about the future of the Perth apartment market and you are keen to gain a competitive advantage, please contact Sam to discuss further at info@propertyesp.com.au.