Buying a house becoming a luxury in Perth post-GFC

Jonathan ChancellorDecember 8, 2020

Building a house is possibly now almost a luxury in Perth whereas before the global financial crisis it was considered a necessity, according to Nathan King, a property valuation director at LMW Hegney.

In the three years before the GFC Perth was producing twice as many houses and green-title lots as strata-titled properties.

“Yet today the numbers within each category are now similar,” King notes.

“Perhaps the GFC and the affordability issues were the catalyst to greater market acceptance of strata-titled property.

“Maybe building a house today is a luxury whereas pre-GFC it was considered a necessity,” he suggests.

“Whatever the reason, I found it interesting, especially when we look at whether this is part of a new trend or is simply reflective of just the stage of the normal property cycle we are in currently.”

King says affordability is the buzzword and strata-titled properties not only tend to cater for the ageing baby boomers but can be among the most affordable housing options available.

“We also welcome some of the more creative and high-specification strata dwellings/cottage lots located in our suburbs to break up the homogenous suburbs.”

He suggests given WA’s urban sprawl and changing demographic, well-located strata properties had become the new aspirational properties to own for a larger segment of the market, reducing commuting times and providing in many circumstances a lifestyle on the doorstep.

“Investors tend to view, particularly strata-titled apartments, as higher income and lower capital growth investments.

“When we tie the trend of ageing population, affordable first homes, and investors wanting to make a profit, all together, there is some common ground.

“These downsize properties in a good location just need to be cheaper than the predominant family homes within the location in order to be desirable as people free up capital as well as time.

“This increasing demand will drive values, giving them a reason to increase if supply is limited.

“For an investor who can recognise these two pressure points in certain areas, they can take advantage of what is considered a trend rather than a cyclical phenomenon.

“It’s always worth being aware of market trends and even better if you can benefit from them,” King concludes.

 

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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