Pick a suburb in the Perth property market before it explodes, where the buying frenzy turns into a mass of panicked buyers, and a property portfolio is suddenly full of equity, leverage potential and profit.
No one has a crystal ball, but buying an investment property in Perth comes down to much more than luck.
Those who take the time to do a little research about the property market in Perth can create substantial wealth while doing nothing more than holding the asset.
Here are some secrets to finding Perth property investments with potential that will help you unlock the door to capital growth.
1. Decreasing stock for sale
Most investors scroll through realestate.com.au looking at curtains and bathrooms instead we should focus on the bigger picture. One of the first signs to look for is whether or not stock for sale in the Perth property market is rising or falling.
When there's a lot of listings and few sales, it's a stressed market. Follow the trend until the number of sales and listings are equal. That's when you buy because prices aren't going up at all. Then you keep watching and see if the number of sales is going up and the listings are decreasing. That's when you might decide to sell. It's the rule of supply and demand.
You can witness this trend and it is currently a good time to buy a Perth property investment in Baldivis and Bayswater.
2. Decreasing days on the market
As well as falling stock for sale, if a suburb is about to explode the ‘days on the market’ for properties for sale within that particular suburb should also be decreasing. This means when a property is listed for sale, it takes a short time to sell. Properties might have been on the market for months but as more buyers try to 'get in' and compete, properties take less time to sell.
This is evident in the Perth property market in Medina and its surrounds.
3. Tight vacancy rates
Downward vacancy rates show that people are moving to an area and it often points to an area growing in demand within the Perth property market.
Tighter vacancy rates are currently evident in Baldivis.
4. Increasing rents
Rising rent is a good indicator because there you've got people who want to live in the area and are willing to pay a bit extra each time. Rents increase for two reasons - they follow values up or there are just not enough properties available.
This is not a common trend anywhere within the Perth property market at the moment. However glimpses are starting to occur on quality Perth property investments in Scarborough.
5. Rising confidence
Confidence might not come with statistics or data but it can add pressure on a suburb. You can pick up the vibe if cafes are packed and if newspapers are full of positive property-related stories.
The Reserve Bank of Australia (RBA) is more concerned about people's confidence levels and how it affects their ability to spend and invest, and will continue to adjust interest rates until consumer confidence improves.
This is not happening yet but the remainder of 2015 will give a clear indication if confidence looks set to improve.
6. A changing suburb
Is gentrification occurring? This refers to the improvement or revitalisation of a suburb that generally results in increased demand for housing and the subsequent increase in property prices. If you want the next ‘hot spot’ in the short term, just look at the last one and buy next door. This process is currently happening in those ‘middle distance’ suburbs which are still affordable but not super trendy. The block sizes are usually quite big and the housing stock is often in the post war period (1960’s – 1970’s and beyond). The suburbs are reasonably close to the city centre, services and amenities plus homes are authentic and well built. They just not very trendy! This trend is currently evident in Bayswater and in recent years has been evident in suburbs such as Padbury, Warwick, Greenwood, Woodvale, Willagee and Palmyra.
If you would like further guidance to help you invest in the Perth property market before an area explodes, contact an Investor Assist Property Investment Specialist on (08) 9200 7200 or firstname.lastname@example.org