Professionals Real Estate Very competitive house prices in the middle to upper end of the property market is encouraging a large number of people to upgrade their home according to David Hobbs, CEO of Professionals Real Estate Group.
Mr Hobbs said that the latest REIWA figures show that during the December 2011 quarter some 64% or over six in ten property buyers in the WA real estate market were upgraders. “People are realising that now is a perfect time to upgrade their home with the gap between lower priced and higher priced properties in Perth shrinking over recent years. “Professionals are finding that more people are now choosing to upgrade their home due to competitive property prices for second and third homes in Perth as well as the growing confidence being created by stable and even falling interest rates. “In particular, Professionals are recording very strong sales activity in higher priced northern coastal suburbs such as Kallaroo, Mindarie, Iluka, Ocean Reef, Mullaloo, Hillarys and Sorrento. “These prime northern coastal suburbs experienced a market correction in prices during recent times with the median house price in Kallaroo, for example, falling by 7.9% over the past year to $580,000.
“Astute property buyers understand that these prime northern coastal areas are currently undervalued with the area historically achieving annual average capital growth rates in excess of 10% over the last decade.
“We are finding that the demand for these properties is being driven by property owners in the sub $500,000 price range in suburbs such as Alexander Heights, Wanneroo, Kinross, Clarkson, Padbury and Heathridge.
“These buyers are seeking to upgrade before there is a major upward price correction in property values of prime coastal suburbs along the northern coastal strip,” he said. Mr Hobbs said that anyone who is considering upgrading their home should consider the following key issues before purchasing a more expensive property:
- Consider buying an established property rather than building a new home. There are many hidden or forgotten expenses involved in building which include renting another property while the new home is being constructed, fitting out the new home which can exceed $50,000, as well as possible time delays in construction. In contrast, when you purchase an established property you can move directly into a finished home.
- Buying a more expensive home does not automatically mean that your new property will increase in value at a much higher rate than a lower priced property. It is wise to buy an older home on a block that has the potential to be subdivided than a much larger home located on a single residential block.
- If you are considering buying a much larger home because you have teenage children, remember that issues such as “smart wiring” are becoming more important due to the growing use of computers and televisions by all members of the family. Check the size of bedrooms as teenage children require much larger bedrooms.
- Many home buyers who own an existing home are now considering bridging finance to fund the purchase of the second home while they sell their existing home. By using this technique of making an offer on another home without having it subject to the sale of an existing property, home buyers are in a much stronger negotiating position. This can often lead to achieving a discount on the purchase price of the new home helping to offset the accumulation of additional interest payments.
For further information on why now is a great time to take action in real estate, contact your local Professionals office by visiting professionalswa.com.au
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