Oliver Searles - Perth Real Estate Agent

According to a recent article i read in the West Australian developer Nigel Satterly predicted the future of blocks in Perth was to get smaller to around 150sqm. These blocks that are being sold by Satterly are just 5 metres by 30 metres. The article suggests that smaller blocks are the future as demand for land is increasing and pricing people out of the market.

MY THOUGHTS:

I feel that 150 sqm blocks is too small. I agree with higher dentisity housing close to the city but these blocks are being sold in Ellenbrook. What do you think?

The median house price of a block of land in Perth is now $215,000 which is down from its peak of $242,990 in 2007-2008. During this same period of time the average wage in Perth has increased from $928.32 to $1,062.82 a 14.6% increase. Also interest rates have fallen from 6.75% to 4.75%.

This means it is a great time to purchase a block of land and build in Perth. Not only have land prices and interest rates stabilised but the range of homes has increased and builders are offering fantastic house and land packages.

The housing market in Perth is set to recover with the rental market tightening and rents rising causing many tenants to start looking at purchasing a house. Investors are also looking at reentering the property market.

The Western Australia Government has just released its new housing strategy which is sure to help the Perth proerty market. The paper is called ‘Affordable Housing Strategy 2010-2020: Opening Doors to Affordable Housing’. Below are the key aspects of the strategy

• Aiming  to achieve 20,000 additional dwellings in Perth by 2020 for households on low to moderate income
• Provide an additional 8,000 home loans through Keystart
• Construct an additional 3,500 social housing dwellings by 2013
• Introduce planning reforms
• A commitment to deliver affordable house and land packages (MY THOUGHTS: I am unsure how they are going to do this without funding it themself. Also the risk of this is that it could cause property and land prices to fall as they have to compete with these lower prices.)
• A commitment to working with industry to help develop affordable housing developments
• The exploration of market based investment options to attract insitutional finance to the sector to address current under investment

Many Perth home builders are offering incentives such as $10,000 shopping sprees, free upgrades and the like to encourage people to use them. You just need to make sure you are careful and not selecting a builder purely based on these offers. Buyers should also check to make sure that the offer is actually a discount off the building price and has not been added into the cost of the building and then discounted down. Buyers also need to ensure that the value of the upgrades is as they advertise because in a lot of cases the goods can be purchased for less than the value the builder claims that they are.

All this being said they are some fantastic deals offered by land developers and builders and now is a great time to consider taking advantage of them.

Now is the time to take advantage of fixed price building contracts and lock in house and land packages as there is a serious risk of construction prices rising due to a looming skills shortage in WA. This skills shortage is due to alot of workers going to work on the mines, going interstate to help in Queensland. Add to this the tightening of Australia’s immigration policy and WA’s rapid population growth and a serious skills shortage is on the cards.

So now is the time to act. The real estate market is sluggish meaning there are many great bargain blocks and properties to be hard. Building costs are low currently so now is the perfect time to build your dream property.