Articles

Buying Fremantle Real Estate Hayden Groves Investment Real Estate

Jan 23, 2017

Why “Now” is always a good time to buy

Should history be a useful indicator of the future, the value of the property you live in today will be worth at least double that in ten years’ time. The quintessential Freo limestone semi will go for around $1.5 million, an Arundel Court flat will fetch around over $500,000 and the ‘80’s brick four bedder in Samson will achieve over $1,000,000. The current flat market conditions makes it more difficult to comprehend how these future values might be realised yet, on average, when looking historically, Perth’s property prices rise by 10 per cent each year and values double every seven years. Sure, you need to choose when to buy and, of course, when to sell. A purchase in June 2007 meant paying the median Fremantle house price of $725,000. Seven years later the median was $823,500 and well short of the anticipated growth rate if following the “double every seven years” theory. The problem is that growth is not linear. If you had bought a year earlier in 2006, the median price was substantially less at $530,000. Ten years on, Fremantle’s regional median house price is $783,750 close to 50 per cent higher. Putting these specific numbers aside, the point is that buying and selling property historically shows some pretty impressive capital gains across relatively short periods of time. Simple math shows capital returns looking even better when holding property for fourteen, twenty-one and twenty-eight year periods. Putting these specific numbers aside, the point is that buying and selling property historically shows some pretty impressive capital gains across relatively short periods of time. Simple math shows capital returns looking even better when holding property for fourteen, twenty-one and twenty-eight year periods. With some very competitive fixed term interest rates available from money lenders at the moment and with plenty of choice out there, making the decision to buy property now with a view to holding it for at least seven years is probably a good one. Make sure you contact your local REIWA agent when it is time to sell in 2026, for if history repeats itself you should sell for about double what you pay today.

REIWA kicks off local discussion on Negative Gearing

The Real Estate Institute of Western Australia has kicked off a campaign to engage with the WA community as proposed changes to negative gearing are debated. In the lead up to the Federal Election, REIWA is seeking the thoughts and opinions of West Australians who use property to help shape their lives a nd secure their future. As part of the campaign, REIWA will share local research and survey results to ensure a balanced conversation on negative gearing. REIWA President Hayden Groves said that the current debate around negative gearing doesn’t focus on the role property plays in the lives of everyday West Australians. "The proposed changes to limit negative gearing to newly built properties will not fully address the issue of housing affordability," said Groves. "Housing affordability can only be solved with a combination of supply levers and planning and development policy reform. "Rather than tinker with negative gearing, we’ll be promoting the need for broader tax reform where the system is simple, fair and efficient. Changing just one part of a very complex system can lead to inefficiencies and distortions. "Over the coming weeks, we’ll be running a series of surveys with members of the WA public to find out what matters to them in regards to property ownership."

Perth Rental Activity Rises

Activity in Perth’s rental market was up last month, with tenants shopping around for better deals. The volume of properties leased during May was up 3.3 per cent on April, new figures by the Real Estate Institute of Western Australia have shown. The volume was up 7.4 per cent compared to May last year. REIWA President Hayden Groves said the analysis pointed to Perth Tenants taking advantage of improved choice in the market to secure a lease at a more affordable price. “It’s pleasing to see that although rental listings remain above long term averages, there is still plenty of movement in the market with leasing figures on the rise across the metropolitan area” Mr. Groves said. “With a wealthy supply of stock on the market and moderating rent prices tenants have a good opportunity to improve their living situation”. The increase in leasing activity during May was felt across most sub-regions, with just the central and south-east sub-regions missing out on higher activity volumes. “The north-east sub-region was the stand out performer in May, lifting 16.6 per cent in April followed by the north-west sub-region which saw an 11.5 per cent increase”, Mr. Groves said. “When compared to May 2015, the south-west sub-region saw the most notable lift in listings – up 21.8 per cent on last year, followed by the north-east sub-region, up 13.5 per cent”. While the central and south-east sub-regions were down last month, leasing activity in those regions was up 2.5 per cent and 6.9 per cent respectively compared to May last year.