perth real estate – PropertyESP

Northbridge ticks all the boxes

Research undertaken by PropertyESP of the Northbridge area for the past 5 years demonstrates that this suburb is perfect for investors.

With a balanced rental market and 4% yield, this locale is one of the best performing apartment markets currently in Perth.

Analysing a total of 1136 sales, the research found some very interesting trends.

Those apartments located between Lord and Beaufort Streets in particular, demonstrated 4% median price growth over the last five years, also representing over a quarter of the sales.

Two bed and two bath dominated the sales (55%) with a median sales price of $550,000.

This area is also dominated by commercial and this definitely had a positive impact on pricing in contrast to other apartments in the entertainment precinct.

Properties have also been held onto tightly with only 33 resales in the five year period.

Close to the newly completed Yagan Square and with vibrant events such as Fringe Festival now on the calendar, Northbridge has certainly become a sought after address.

And as for investors, with 66% of the population renting in Northbridge, the figures add up to representing a good investment option indeed, especially in light of the Melbourne and Sydney markets now coming off the boil. And trends from ABS also demonstrates that close to 90% of households are singles or couples with a media household income of $1767/week.

When considering a property investment you certainly want a competitive price, strong rental market and signs of price growth and in this equation, Northbridge scores 100%.

For further suburb analysis contact the team at PropertyESP – we make sense of property!

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.

But if in fact, you had decided to wait until 10^th 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.

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

And unit sales over the same period.

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!

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.

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.

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).

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.

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.

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 2^nd 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.

How a few streets can make a big difference to property values

As always, keen to see what is happening in the Perth apartment market, PropertyESP recently took a look at settled sales for the East Perth area from 2015-2018.

Looking just at apartment houses, apartment units and penthouses we found that the East Perth market was showing signs of price recovery across the board.

But when we broke East Perth into precincts we found that Wellington Square compared to Claisebrook and the remainder of East Perth, definitely demonstrated a price difference.

And this was evident whether talking about apartment houses, units or penthouses or even 1, 2 or 3 bedrooms.

Who would have known?

It is quite evident that while sales vary across suburbs they can also do so within suburbs and hence before you purchase land for development it really is best to check your facts. At the end of the day it can play a major factor in your pricing and profit and hence it is essential to know how the sums add up!

If you are seeking that level of detail then contact Sam at PropertyESP because we are all about drilling down into the nitty gritty! And we are the only company in Australia that provides this kind of insight!

Women are taking over the world (did you get the memo?)

After a number of recent events including International Womens’ Day, PropertyESP Director Samantha Reece thought she would share some insights into how women are forging ahead with property ownership.

“Westpac’s annual Home Ownership Report recently revealed that women are overtaking men when it comes to home ownership.

A survey of more than 1,000 Australian home owners and first-home buyers found that women are ahead of men in most categories:

more women have bought a home to live in (women 28 per cent of survey respondents compared with men 20 per cent)
more women have bought an investment property (16 per cent compared with men 13 per cent)
more women are renovating (29 per cent compared with men 27 per cent)
and more women are selling a property (17 per cent compared with men 14 per cent).

The report also found that more women than men ‘strongly believe’ that ‘owning your own home is a reflection of your success in life’ (up 26 per cent on last year) and that ‘property is a pathway to wealth’ (up 10 per cent on last year).

Female first-home buyers were twice as likely as men to consider good investment potential in a home as essential (35 per cent vs men 18 per cent), and were also twice as likely to consider buying an investment property in the next five years (22 per cent vs men 11 per cent).

Overall, 71 per cent of women are ‘considering housing actions in the next five years’, as opposed to 61 per cent of men.

And data from the ATO shows the number of female taxpayers receiving rent has risen from just under 14 per cent in 2010-11 to 15.4 per cent in 2014-15. By comparison, over that period men only saw an increase from 14.7 per cent to 15.9 per cent. The ATO data also indicates that approximately 47 per cent of all investment properties are owned by women.

With an increase of 3000 females in the workforce in WA over the last quarter, it is evident that women are securing greater financial independence and hence making their own business decisions when it comes to property. This is also affected by the fact that the average age of a woman who marries in WA is now 29 and the State recorded the highest proportion of divorces nationally at 48.3% in the 2016 census.

But more close to home, PropertyESP recently conducted research with buyers of the Stockland Completed Homes and found that women had a huge influence over the final purchase. While the husbands took their wives to other houses that were cheaper and bigger – it was futile – because when these women inspected the Completed Homes, it was literally love at first sight! There were also cases where the women sourced additional income from lenders and family in order to stretch their budgets and buy what they wanted!

These trends will ultimately have an influence over how a company markets and sells their properties – especially on a face to face level in the sales office.

The question is – are you ready for this new wave?”

Perth does offer apartment choice

PropertyESP just completed some research on behalf of the Property Council examining the number of 3+ bedroom apartments located in the Perth LGA.

Contrary to popular belief, PropertyESP actually identified 1135 sales of 3+ bedroom apartments from 2012-2017, with the bulk of these in East Perth (697).

But other locations including Crawley (134), Perth CBD (127) and West Perth (134) also reflected these larger apartments.

But what we also witnessed was the decline in sales for these larger apartments with 279 sales recorded in 2012 and just 95 in 2017.

It makes us wonder if this decline is due to these apartments being tightly held onto or alternatively a lack of supply?

Over 900 of these sales were also apartment houses in contrast to penthouses or home units and interestingly it was these apartments that reflected an increase in median price from $690,000 in 2012 to $860,000 in 2017.

On the other hand penthouses which were selling at a median price point of $1.7 million in 2012 are now selling at $1.5 million and home units (smaller complexes without lifts) which had started at a median price point of $534,000 in 2012 were priced at just $477,500 in 2017.

However, considering trends with baby boomers and the family sector, apartment developers will have to consider increasing the ratio of three bedrooms within the City, beyond a token gesture.

Data has shown that Perth is second to Sydney across the nation for the number of families residing in apartments.

Plus nationally only 5% of our seniors in fact choose a retirement village when looking to relocate out of their traditional family home.

Perth is evolving and people are choosing to reside in the City because of its strong employment base and vitality (as a result of improved infrastructure) and on that basis we need to reflect this in our ongoing housing options.

If you are seeking this kind of intelligence (and who wouldn’t?) then contact the team at PropertyESP. We make sense of property.

Apartments transform suburbs – and for the better!

Curious to see what has happened with the recent 2016 census, PropertyESP took a look at 3 suburbs that have been transformed by apartment developments to see what other changes to the suburb this had brought.

East Perth – originally an industrial suburb, EPRA (now MRA) was established in 1991 to redevelop and urbanise the suburb. It did so with the development of Claisebrook Village, with introduced 1450 new dwellings as well as retail and commercial properties on the site of the former East Perth Gasworks, scrap yards, contaminated industrial sites, empty warehouses and railway yards (Source: MRA Claisebrook Village Fact Sheet).

In the 2001 Census of Population and Housing, East Perth (which is broader than just Claisebrook Village) had 1631 occupied private dwellings that were apartments and flats (making 81.2% of all occupied private dwellings in the suburb). By 2016, this had risen to 4018 apartments and flats (88.8% of occupied private dwellings). The big transformation of East Perth occurred between 2006 & 2011, with the addition of 1160 occupied private dwellings that were apartments and flats (a 67% increase), and between 2011 & 2016, with the addition of 1125 occupied private dwellings that were apartments of flats (a 39% increase).

What else changed in East Perth over this time?

There was a change from these apartments and flats being predominantly rentals to owner occupied. In 2006 and 2011, the level of owner occupancy was hovered around 34%. By 2016, 64% of occupied private dwellings that were apartments or flats were owner occupied. Over the same period, the level of owner occupancy for apartments and flats in Greater Perth was unchanged (around 32%). With the redevelopment, people are choosing to own and live in apartments and flats in East Perth.
Median household incomes for the suburb have surged ahead of Greater Perth. In 2006, the median household income for East Perth was $1106 per week … on par with the $1086 for Greater Perth. By 2016, median household income for East Perth had risen to $2301, well ahead of the $1643 for Greater Perth.
The types of households attracted to the suburb has changed. In 2001, 46% of East Perth households were lone person households and 29% were couple households. By 2016, the two were on par – 37% lone person households and 36% couple households. Both groups have remained relatively stable across Greater Perth over the same period. Whilst families have not been attracted to East Perth in droves – they currently make up 16% of households – they have risen in number, up 251% from 210 households in 2001 to 737 households in 2016.

Burswood – another older suburb that gained new life and widespread awareness with the building of the (then) Burswood Casino in the 1980s. The suburb was officially gazetted in 1993. Subsequent apartment developments in a similar vein to East Perth have continued to change the suburb but it’s location on the eastern bank of the Swan River provides for a different lifestyle experience to East Perth.

The 2001 Census of Population and Housing counted 187 occupied private dwellings that were apartments and flats (making 37.4% of all occupied private dwellings in the suburb). By 2016 this had risen 183% to 530 occupied private dwellings that were apartments or flats. More importantly, this changed the housing profile of the suburb, with 57.2% of occupied private dwellings being apartments or flats. The really big transformation in Burswood occurred between 2006 & 2011.

What else changed in Burswood over this time?

As was observed in East Perth, there was an increase in owner occupancy of apartments and flats in the suburb. In 2001 and 2006, the level of owner occupancy was hovered around 21%. This rose to 36% in 2011 and 41% in 2016. Apartments and flats in Burswood are still the domain of renters, but it has seen a doubling of owner occupancy levels over 15 years.
Median household incomes for the suburb have surged ahead of Greater Perth. In 2006, the median household income for Burswood was $1091 per week … on par with the $1086 for Greater Perth. By 2016, median household income for Burswood had risen to $2273, well ahead of the $1643 for Greater Perth.
The types of households attracted to the suburb has changed as well. In 2001, 38% of Burswood households were lone person households and 31% were couple households. By 2016, the situation has reversed – 30% lone person households and 38% couple households. The proportion of family households has also increased, up from 18% in 2001 to 23% in 2016. In numbers, they have risen 14% from 87 households in 2001 to 213 households in 2016.

Cockburn Central – the first purpose built TOD in the Perth metro area. It was named in 2007 and was counted as a separate suburb for the first time in the 2011 Census. The 2016 counted 403 apartments or flats as occupied private dwellings, making up 70.8% of the 569 occupied private dwellings in the suburb. At 10 years of age, there’s not much history or transformation to explore. But as a purpose built regional centre for the surrounding area and designed with density and connectivity in mind, it serves as an interesting comparison to the other suburbs.

Firstly geography, Cockburn Central is 24km from the Perth CBD, connected by the Kwinana Freeway and Transperth rail. That makes it further from Perth than East Perth and Burswood. It has a number of employment opportunities close by, and is also well placed to connect to employment opportunities in the Perth CBD and the SW metropolitan industrial areas.

Who is living in Cockburn Central?

Cockburn Central is very much a renters suburb. At the 2016 Census of Population and Housing, 71% of occupied private dwellings that are apartments or flats are rented, higher than for Cockburn Central properties in general (58%). The level of renting is higher than for Greater Perth.
Median household income for the suburb is similar to Greater Perth – $1625 per week.
37% of households are lone person households (similar to East Perth), 34% are couple households (lower than East Perth but, like East Perth, the proportion of couple households is growing).

With the newness of this suburb, it does tend to however indicate that it may follow the same pattern as Burswood and East Perth in time.

As PropertyESP has always attested – apartments in the housing mix does tend to attract a more professional resident with higher disposable incomes and that is good for the LGA overall. If you would like to know what is happening in your suburb of development contact Sam Reece at info@propertyesp.com.au. We love to get into the nitty gritty!