Professionals Real Estate The upgrader market should continue to perform strongly during the coming year due to more stable interest rates and very competitive house prices in the more expensive suburbs of Perth.
REIWA figures show that during the last financial year, sales of houses priced above $600,000 accounted for 30.9% or around one in every three house sales. In comparison, houses priced above $600,000 accounted for just 21.3% of total house sales for the previous financial year.
It is currently a buyer’s market in the more expensive suburbs of Perth and this is underlined by the fact that during the June 2010 quarter some 71.3% of property sellers in the Western suburbs were discounting their property prices by an average of 8.8%.
However, the outlook for the top end of the Perth real estate market still remains positive moving into 2011 with major new resource projects such as the Gorgan starting to have a much greater impact on the local economy.
Now is an excellent time to consider upgrading your home and take advantage of the window of opportunity that currently exists in the top end of the Perth real estate market. 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. If you build a new home there are many hidden costs such as renting another property while the new home is being constructed, fitting out the new home which can exceed more than $50,000 as well as possible time delays in constructing. Lifestyle features such as swimming pools are also expensive to install and buying an established home with these features can prove more cost effective.
- Buying a more expensive home does not automatically mean that your new property will increase in value at a much higher rate. The annual capital growth rates of suburbs with properties priced above $600,000 can vary greatly depending on the location. It is wise to check the annual capital growth rate of the suburb for the previous 10 years before making a final decision on the property.
- If you are considering buying a much larger home because you have teenage children, check the size of bedrooms as teenage children require much larger bedrooms
- The property should have a double garage as a minimum if you have children going to university or entering the workforce as they will need a car. Properties with double garages could have a higher resale value than homes with a single garage or carport.
- Consider buying an older style home on a duplex block. You can renovate and improve the older home and then sell it at a later stage and build a smaller property at the back when you no longer require such a large property.
- If you have not found another home and would still like to sell your home, consider a rent back arrangement with the new homebuyer. This will allow you to remain in your property for a number of months until you have found the right property.
- Alternatively, if you have not sold and found an extremely well priced home to upgrade to, consider making a subject offer or even better, purchasing the property with home to home finance. With interest rates now stabilising, this option allows you to immediately purchase the second home and can give you a stronger negotiating position.
- Coastal and river suburbs have traditionally been the most sought after suburbs for upgraders. Currently, there are a number of undervalued suburbs in these locations where you can still purchase a competitively priced property. These suburbs include Coogee, Fremantle, Beaconsfield, Manning, Ascot, Guildford, Kallaroo, Scarborough, Mullaloo and Mindarie.
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