The affordability of properties in Perth’s southwest is attracting decent buyer numbers, a trend that is expected to continue in the springtime, according to Paul Curran, Principal of Raine & Horne Rockingham.
“It is possible to buy a three-bedroom house for $220,000 and less in Rockingham. This level of real estate affordability is attracting investors, especially when they can buy at yields of above 5%,” Paul said. To illustrate, Raine & Horne Rockingham has recently listed a three-bedroom house in Casilda Place, Cooloongup with a below ground pool for $209,000.
“At these yields and prices, it’s a no-brainer to invest in real estate. In comparison, cash is returning next to nothing, and the US/China trade wars have spooked global share markets.”
Fortuitously, the local resources industry is providing job opportunities that will underpin rental and sales markets, Paul noted. The Tianqi lithium hydroxide plant in the Kwinana Industrial Area has recently opened. This plenty will meet the rapidly growing demand for rechargeable batteries driven primarily by the electric vehicle and energy storage system industries. More significantly for the local real estate market, the plant is creating hundreds of jobs for locals, said Paul.
“Jobs growth will underpin ongoing demand for property in the Rockingham LGA,” he added.
Further south in Mandurah, well-priced houses and units are attracting significant interest, according to Peter Vetten, Principal Raine & Horne Mandurah. “We recently sold a tranche of six new two-bedroom apartments on behalf of a developer for around $200,000,” he said. “We have found that around 90% of our sales are under $360,000 in Mandurah.”
Unlike Rockingham, downsizers rather than investors will lead the charge in spring, Peter commented. “Our buyers are downsizers who are recognising Mandurah can be the Florida of Western Australia. It’s a pretty town on the water that is only 65 kilometres from the city.
“Perth buyers also recognise the town’s excellent real estate affordability, which is complemented by excellent road and rail transport services back to the capital.”
Another quirk supplementing Mandurah’s appeal with retirees relates to the regional city’s medical fraternity. “Because Mandurah is considered regional, we have attracted many doctors who have recently arrived in Australia,” Peter said. “Due to the terms of their visas, these doctors have to work regionally for up to five years.
“As they want to get their practices up and running as fast as possible, the majority bulk bill, which sits well with retirees. They can visit a doctor, and it doesn’t cost them anything.”
Looking ahead to spring, Peter believes Mandurah’s affordability, combined with the growing presence of second-tier lenders, will encourage more buying activity. “Bendigo, ING, Suncorp, and P&N Bank seem to be doing more business while the four majors continue to be a bit more difficult and take longer to process loans.”