The Perth property market has been on the move recently. Prices are down compared to other capital cities in Australia, but this could be good news for those looking to build a new home in Perth. Some property experts are saying we’re approaching the bottom of the market cycle. This could mean that it’s a great time to build a home in Perth.
In this post, we’ll take a closer look at the inner workings of the property cycle. As you’re about to see, we’re about to enter a prime buyer’s market.
How the Perth Property Cycle Works
The economy moves in cycles, and the housing market is no exception. It takes several years for the property cycle to run its course, but there are predictable ebbs and flows that economists can record and interpret. This intel can be leveraged by prospective home buyers who are interested in buying or building a home in Perth.
Cycles like this move in phases – each one feeding into the next and ultimately returning to an original position. To be fair, there’s no way to guarantee precisely when the next phase will take hold, but economists can say with relative certainty what to expect next. With this in mind, understanding how the property market changes, fluctuates and ultimately turns back on itself can help investors make informed decisions regarding when and how to invest in property.
These Are the Four Stages of the Property Market Cycle
There are four overarching stages of the property cycle. These apply virtually anywhere in the world, and Perth is no exception. Here are the four major stages that most property markets progress through:
In the ‘boom’ phase, property valuations are on the rise. This usually results due to an extreme demand for new housing, followed by a shortage of tradespersons to build those properties. At this phase of the cycle, you’re hear plenty of media hype regarding the disparity between supply and demand.
The aforementioned boom leads to an increase in property prices. Landlords suffer losses and put rents up. The result is a crisis of affordability, with fewer people signing leases – simply because they cannot afford to. This ultimately leads to an oversupply in housing stock.
With so many houses on the market, the local builders and tradespersons in Perth suddenly find themselves out of work. They begin competing with one another, driving down prices and ultimately resulting in a market that’s heavy on the sellers’ side. At this point, confidence in the property market takes a turn for the worse.
That slump in confidence leads to a decrease in new builds, and this will eventually mean that there aren’t enough houses on the market for potential buyers. The housing stock tightens, and buyers who are willing to pay a bit more emerge. When enough time passes, we find ourselves back in a boom phase. At this point, the cycle continues.
Perth’s Property Market Is Near the Tipping Point
Perth is currently in the midst of a market slump, but it looks like we’re about to enter an upswing. This is the point at which the property market veers into recovery territory and ultimately heads for the next boom.
For property investors who operate in Perth, this is the prime time to begin looking at new opportunities. But even private buyers are wise to pay attention to these trends. If you’ve been considering the possibility of buying or building a new home in Perth or greater WA, this is the time to do so.
There Has Never Been a Better Time to Buy a Home in Perth
If you have been toying with the idea of designing and building your own home in Perth, now is the time to do so. RedInk Homes can help you build the home of your dreams in a location that perfectly suits your needs.
If you commission us to build your dream home today, there is a strong chance that it will be worth much more in the coming years. Contact us today to find out more about our home-building process, and lay the foundations for your future.