APM: Rents Coming Down in Perth

The Australian Property Monitors today released figures that would have renters cheering in Perth as they show a 6.7% decline in the median asking rent for houses from $493 to $460 per week over the past year. For units in Perth, it was a 5.9% decrease from $425pw to $400pw which, apart from Canberra, was the only market in Australia to go backwards.

For the landlords, gross rental yield in the last 12 months has declined 5.8% for houses and a massive 8.9% for houses! Now, a Perth landlord can on average expect a yield of 5.02%. The slowing mining boom and a record numbre of multi-residential dwellings under construction in Perth will continue hurting the Perth rental market. Business investment, often a lead indicator for the real estate industry, is expecting an 8.25% decline in the 2014-15 financial year.

RBA Holds Interest Rate at 2.5% for 1 Year

Today, the Reserve Bank of Australia again decided to hold the interest rate at 2.5%. It has been one year since any change has been made to the central bank rates. Last year in August, the RBA dropped the rate by 25 basis points. The statement from the RBA was almost like a carbon copy of last month's announcement and the outlook from many economists is that the rate won't be changing any time soon. The Aussie dollar didn't move much in response to the announcement, having already factored in the assumption that rates won't change.

Cheapest, Closest Suburbs to the City

There was an article on Perthnow yesterday about how the suburbs 15-30km from the Perth city centre will be the top performers in the next 12 months. What was interesting was how they narrowed down a couple of suburbs that seem to be relatively cheaper than suburbs around the same distance from the city.

1. Within 5km Glendalough was the cheapest suburb within 5km of the city. The median house price there is $607,000. The median house price for houses within 5km of the city is $897,840. 
2. Within 15km Only three suburbs have a median house price of less than $400,000 and is within 15km of the city. They are Lockridge ($372,000), Girrawheen ($390,000) and Koondoola ($397,000). Average price of suburbs that are from 5km-15km of the city is $777,883. 
3. Within 30km 13 suburbs in the zone with median house sales prices of less than $400,000: Brookdale ($309,750), Camillo ($312,000),Armadale ($315,000), Midvale ($350,000), Bellevue ($352,000), Koongamia ($352,000), Stratton ($357,250), Kelmscott ($360,000),Maddington ($360,000), Gosnells ($365,000), Middle Swan ($380,000),Seville Grove ($380,000) and Midland ($395,000). Otherwise, the median house price for suburbs in this area is $583,899. 

While distance is not the only factor, this helps some homebuyers who work in the city to make a decision about how far out they are willing to go in order to find a home they want. Crime is also a very big factor for many people with some suburbs notorious for their crime. This would also affect the median prices of some suburbs listed above. 

With the new stamp duty threshold sitting at $430,000, I would think that many of these suburbs will experience a growth in house prices in the coming month.