South West WA market continues to weaken: HTW residential

South West WA market continues to weaken: HTW residential
Staff reporterDecember 7, 2020

The Perth market has continued to weaken over the past 12 months and the downward pressure on values has flowed into the South West market, according to a recent Herron Todd White (HTW) residential report. 

Financial institutions have tightened lending criteria in the wake of the Banking Royal Commission and investors remain cautious.

The report notes this has ultimately halted the recovery of the Perth property market which was showing some signs of resurgence through the middle of 2018.

This has also filtered down into the South West property market which had been resilient in recent years on the back of strong population growth.

Entry points into the lower end of the market range from $250,000 to $400,000 and for this amount you can purchase either a basic established residence or build a project home in one of the outlying new developments.

"In general, these established homes are located in closer proximity to the beach than the new developments and as such the established homes generally offer better capital growth potential while the new housing market offers better yields," the valuation firm said. 

"The lower market segment is generally being driven by first home buyers and investors."

The outer suburbs and new developments continue to experience low growth and a decline in values as reflected by low levels of demand and a low number of listings reported by local agents.

This is particularly evident in the greater Bunbury and Busselton urban areas.

A three bedroom family home in South Bunbury has recently been sold for $361,000 (pictured below). 

Situated at a 503 square metre corner block, the home at 12 Gibson Street comes with four bedrooms, timber kitchen, open plan living/meals and separate dining. 

Other features include enclosed garden, split system air conditioner and gas hot water system. 

South West WA market continues to weaken: HTW residential

"Values in well located population centres and coastal precincts had been stabilising up until recent times, but now we are seeing these localities also weakening in values," the valuation firm commented. 

The report suggests well located and well-presented properties between $500,000 and $900,000 have been stable up to recent months but now have also started to show a weakening in values as the tightening of credit takes hold.

It is generally the mums and dads who are active in this space as they are looking to upgrade the family home and currently this market segment is offering good value for money.

These homes are generally located in close proximity to the ocean, schools and town infrastructure.

"The upper end of the market continues to experience weak demand with limited numbers of transactions in excess of $1.5 million.

"That being said, the South West is considered to be a premium holiday destination and there is still demand from the wealthy to invest and holiday in the region," the valuation firm added. 

As such there is still adequate demand for high end and well-presented beachside property.

Prestigious properties scattered throughout the South West, such as at Naturaliste, Eagle Bay, Metricup and Yallingup, are still recording sale prices in excess of $1 million on a regular basis.

A current listing is an Eagle Bay beach house priced at $1.895 million (pictured below). 

Situated on a 1,682 square metre block, the single level house at 11 Eagle Bay-Meelup house comprises five bedrooms, open living area, and kitchen.

Other features include Marri timber floors, verandah area, and garage/workshop. 

South West WA market continues to weaken: HTW residential

Editor's Picks