There’s no denying the Perth property market is hot right now. Along with local demand outstripping current supply, Perth is experiencing an influx of investor activity, driven by affordability with one of the lowest capital city medians along with Adelaide. This is welcome news for existing property owners but highlights the importance of a clean and competitive offer for those buyers needing to get an edge on the competition to get their offer accepted.
Boasting both relative affordability and a somewhat insulated economy, the constant onslaught of rising interest rates we saw in 2023 has had less of an impact on the Perth housing market than the rest of the nation. As a result, Perth weathered the downturn better than anywhere else and is now the country’s stand out market in terms of monthly growth.
To back that up, the latest data reveals that 84 of the quickest-selling suburbs in Australia are currently located in Perth. Days on Market (DOM) is the lowest of any capital, sitting at 11 days, down from 21 days 12 months ago. By comparison, the national average is around 30 days.
Perth house prices growth looks set to continue
If you’ve been sitting on the sidelines waiting for the market to drop, it appears you’ll need to wait a little longer as the data suggests it’s not happening anytime soon.
Perth’s median house price surged by another +1.6 per cent in January, bringing quarterly change right up to +5 per cent. Annual growth has also soared, currently sitting at +17 per cent for the year.
Perth property market forecast 2024-25
Westpac’s Perth real estate forecast also predicts another +10.0 per cent upswing in 2024 and +8.0 per cent due in 2025.
NAB’s latest Perth house price forecast suggests values could increase by another +9.9 per cent in 2024 with a further +6.2 per cent to come in 2025.
ANZ is tipping an increase around the 7-8% mark, with CBA coming in at conservative estimate of 5%.
What impact will interest rates have on Perth property?
With the cash rate currently sitting at 4.35 per cent, the banks expect there will be no further hikes, tipping that rate cuts will begin in the later stages of 2024 or early in 2025. So, if anything, the interest rates will almost certainly not cause any issues for Perth property growth, and perhaps even bolster it further as rates start to come down.
With all of this in mind, it makes for interesting times ahead for those prospective Perth home owners. If you are looking to enter the Perth market, you’ll need to go in armed with knowledge and information, and a strong offer.
What will help me get my offer accepted?
As demand remains highly charged, with packed out home opens, buyers need to make sure they’re doing everything in their power to secure a suitable property within their budget. The first step is to determine exactly what your budget is. Unless you’re going in with a cash offer, how much can you afford to borrow will depend on factors including your income and your current liabilities. We can help you figure this out within minutes over the phone.
Call to find out how much you can borrow now.
Can I get pre approved for a home loan?
With buyers hoping to get the upper hand on other offers, some might argue that a home loan pre-approval could provide some advantage. While it’s true that it may give sellers some confidence that your subject to finance offer will definitely be approved, it’s important to know that this is not a surefire sign with all lenders. As lenders remain busy, some banks will automatically approve your loan on a conditional basis. Others will run a full pre-approval check, giving you more certainty that your finance will be approved upon formal application.
How do I know which banks do a full pre-approval check?
That’s where we come in. With in depth knowledge of each lender and their individual practices, as well as their approximate current waiting times, we can select a lender that will do a comprehensive pre-approval assessment, as well taking it account current lead times if there are any time sensitive milestones for you.
Consider a bridging loan
A bridging loan or bridging finance, is basically a short term loan that can finance the purchase of a new property while you are selling your existing property. So instead of writing an offer to purchase that is subject to the sale of your current home, you could consider a bridging loan instead.
Other things to consider if you’re wanting to buy a home
If you are in the market and will be applying for a home loan to finance the purchase, there are a few things to consider that may impact your timeline to getting approved.
Changing jobs
If you’re likely to need your finance approved sooner rather than later, you’ll need to understand the lenders terms around employment. Generally speaking they will want to see one payslip for a full time job, 3 months of ongoing employment for a part time role, and 6 months of ongoing employment for a casual role. So if you’re thinking of submitting an offer, maybe press pause on any job changes.
Other big purchases
It may not be the best time to make any other big ticket purchases before your home loan is approved as this will obviously impact your borrowing capacity and ability to service home loan repayments in the eye of the lender.
Reduce current debt
If you can close your credit cards, do so, or if you can’t then consider reducing the limit. Even if you only have $500 owing on a credit card with a $5000 limit, the lender will assess your application and borrowing capacity at the higher amount.
Arm yourself with knowledge
Start reading property reports and taking note of recent sales in the area that you’re trying to buy into. Speak to local real estate agents so you can really get a grip on what’s going on and where your offer needs to be. Low balling won’t work in this market.
Put yourself in the sellers shoes
Not all offers to purchase are considered equal and it pays to be flexible when it comes to negotiating terms of your offer. Ideally, you want to present something as “clean” as possible. That means your offer should include as little barriers as possible, without putting yourself in an awkward position of course. You still want to be doing your due diligence and making sure the property is a good fit for your needs. Other things that might help are finding out if the seller is interested in a short or long settlement.
By knowing the answers to these questions you can tailor your offer to suit the seller that may give you the edge over another offer of the same or similar amount and get you an accepted offer.
Change your strategy
If you’re hoping to get into the market but keep missing out on the type of home you are making an offer on, could you consider widening your scope. Could you buy something in a cheaper location and then work on adding value for a couple of years. If you’re desperate to get into a specific area for whatever reason, you may need to consider something smaller or different to what you had in mind. With plenty of growth still to come from the Perth market, it might be a case of compromising on your wish list in order to secure a home that will almost instantly start gaining value.
And last but certainly not least
Get a good mortgage broker
While it might seem obvious for us to say this, it really can make or break having your offer accepted or not. It’s our job to know what the market is doing and to help you where we can with valuations and other useful information. Primarily understanding your budget so you don’t waste your time and energy bidding on homes you can’t afford is one thing, but having someone driving the whole loan application process for you could be crucial in giving the sellers confidence that your finance will be approved over someone who is doing it themselves by working directly with the lender. We’re here to save you time and simplify the whole process for you.
*Please note this information is general. The terms and conditions of particular loans differ. **Please note, we do not provide tax, legal or accounting advice. This content is for general informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. We encourage you to consult your own tax, legal and accounting advisers before engaging in any transaction.
