AUTUMN 2013
PROPERTY REPORT
THE LATEST NEWS FROM RWR REAL ESTATE
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A method to ensure
your property will
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Renovate a
Rental property
Will it pay
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This is a great
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Is it a good
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IT’S BEEN A HORROR 5 YEARS
but the turnaround has arrived
Just about every homeowner would be
aware that Perth property values have
retreated over the course of the past
five years.
The good news is that the latter half of 2012
saw the market begin a turnaround with a
surge in sales during the December quarter
taking Perth’s median price to $495,000, a
rise for the year of 3.4%
It’s interesting to note, however, that despite
the overall improved performance, the
median price according to figures released
by RP Data is still 4.2% below peak which
translates to a negative of -0.1% average
annual growth over the last five years.
This retreat was the third most severe
around Australia with only Hobart -1.1% and
Brisbane – 0.7% faring worse.
Nevertheless, when you look at the growth
over the last decade, Perth’s median price
averaged an annual growth rate of 9.1% - well
ahead of the capital city average of 5.1%.
The particularly interesting aspect to Perth’s
last quarter’s improvement was the fact that
SUBURB STATISTICS
Source: REIWA
Median price
yr to Sept
Qtrly change
Annual
change 1
year
$1,155,000
-3.8%
0.4%
-1.1%
Como
$799,000
2.9%
-5.0%
-0.5%
8.8%
Kensington
$790,000
1.3%
5.7%
1.5%
9.3%
Victoria Park
$580,000
0.0%
-6.1%
1.1%
8.9%
Manning
$702,500
-5.1%
-4.1%
1.0%
9.6%
Salter Point
$960,000
2.7%
-5.6%
-2.3%
8.4%
South Perth
Ave annual
% change 5
years
Ave annual
% change 10
years
9.6%
sales in November were 47% higher than in
November 2011.
That’s a substantial improvement in market
tempo – and we can tell you that the
tempo is continuing. Properties priced up
to $750,000 in this region have been selling
exceptionally well with multiple offers often
being received.
Market storm
In some respects it is a market storm
environment- a major shortfall of properties
on the market, a significant return of
buyer confidence, a buoyant share market,
the lowest interest rates seen for many
years, high rents and strong rental market
continuing and the effects of the mining
industry’s construction boom now filtering
into the community.
So we’re not surprised that things are
happening – and to help sellers take
advantage of the situation we’ve devised a
new way of selling, ‘For Sale by Best Offer’.
For those interested in selling their property
in the coming year, we think you’ll be excited
by this as we believe it will get you the best
price possible.
Further details page 2.
Mark
Wellingham
Principal
Mark
Robinson
Principal
A method to ensure
your property will
be sold for the best
price possible
If you have had a horror real estate
experience we would like to hear
about it.
The experience could relate to a terrible
mistake you’ve made or relate to a bad
experience with a real estate agent or
settlement agent or an occasion at an
auction – whatever.
The reason we would like to know is
that it could be a good warning to others
and it might be handy for a report being
compiled on mistakes to avoid.
If you would care to send us an outline of
the horror experience, you stand to win a
red wine twin pack.
You can send it to [email protected]
or in writing to Suite 5, 53 Angelo Street,
South Perth 6151.
Has the offer been the best they’ll get? Is
there a buyer just around the corner who
will make a better offer?
These thoughts especially arise on the
occasions when we find a buyer quickly
which can sometimes occur in the first few
days of a property going to market.
We’ve sometimes found a buyer from our
data base of prospective buyers before a
property has been advertised. That often
leaves a seller wondering if a better price
could be obtained by rejecting the offer and
having the property advertised.
Confidence
So that sellers can have confidence that the
best price possible has been achieved in the
current market conditions we’re introducing
a change to our marketing whereby we
advertise properties ‘for sale by best offer’,
accompanied by a buyers’ guide price, open
dates and an ‘offers closed-by date’. The
period to closing will be 21 days.
If you would like to know more on this
subject, we have a free report that is
This route to a sale in a sellers’ market is
more effective than going to auction because
it costs the seller much less, it gives us
time to negotiate the best price possible
and at the same time it enjoys the benefits
of an auction because there is a level of
competition.
We believe this will attract those in the
market for the particular type of property
to investigate and to make an offer, guided
To spend or not to spend –
and on what?
If you’re thinking of selling a
property in the near future and
you’re wondering whether it’s
worth spending money on the
place before putting it to market
– do you know what is worth
spending money on and what
won’t get you a return?
by the buyers’ guide price. Obviously, those
keen to purchase the property will submit
their best offer for fear of being outbid by
someone else.
the ideal thing for those people who are
thinking of selling.
There’s lots of tips and advice that can
save you money – and make you, money.
Anyone who would like a copy is
welcome to call us on 9474 6899. We
can either email it as a pdf to you – or
post you a copy.
FFrreeee rreeport
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This is a great
time to upgrade
RENOVATE A
RENTAL PROPERTY
Will it pay dividends?
If you have equity in your home and are
in a position to upgrade to a larger home,
now is an excellent time to be making this
move.
The reason for this is that the lower priced
properties under $700,000 are selling really well
with prices firming while upper level properties
are still selling slower than what they would be
when the market has returned to full strength.
The strength of the lower end is why some high
priced localities are currently showing a negative
in their median prices. It doesn’t mean their
values have recently decreased, the median is
simply reflecting where the volume of sales has
been.
Nevertheless the fact remains the higher up
you go in price, the better the buy because the
momentum of the market hasn’t percolated
upwards to the extent that it has at the lower
levels. It means higher priced properties can still
be bought at a good price – if they’re to achieve
a sale.
This situation is gradually changing and the
strengthening market will percolate upwards
fairly soon.
If you have invested in a rental
property and held it for a few years it
might be worth giving consideration
to renovating it.
The idea of making improvements to a
property is worth doing when there’s
potential to make a profit.
The following illustrates how renovation
can be profitable.
Expenditure of $32,000 was made on a
1960s 3 bedroom home on a 432 sqm
block in refurbishing the kitchen, bathroom
and laundry, installing built in robes,
repainting the interior and rendering the
exterior to give it a more modern look.
Some money was also spent on the yard
to make it low maintenance.
A gas oven was installed in the kitchen
because tenants prefer gas and the air
conditioning system was upgraded.
The upgraded house was then let for $200
a week more than the previous rental
amount. So was that a good proposition?
Calculations showed the $32,000 plus
interest on the loan would be paid off
by the extra rental within four years especially when tax deductible allowances
were taken into consideration. This was
even after allowing for interest on the
renovation cost and lost rent during
renovation.
So is that the case for all properties?
An upgrade needs to be paid back by
improved rental yield within 5 years and
the key to profitable renovation is that
the refurbishments should only extend
to items that are going to improve rental
returns.
Renovations also offer
secondary benefits:
▪▪
Reduced maintenance
▪▪
A tenant is more likely to look after
a smart property
▪▪
The property is likely to have
a better quality tenant which
generally means fewer problems
▪▪
Raised resale value
▪▪
Reduced vacancies and loss of
income
▪▪
A modern, newish property will
achieve better rental increases
If you have a rental property
you’re considering upgrading
why not have a chat with
us about the potential to
increase returns. We’re happy
to help.
Already, we have achieved some sales above the
$1million mark and we know that Cottesloe
has seen some sales in the $3million category
whereas over the last couple of years high
priced property like this had been near
impossible to sell.
So with that in mind….as Robin Williams said in
that wonderful mov’e, “The Dead Poets Society”,
Carp Diem! – which translated means, ‘Seize the
Day’!
Would you like
to be on our
fast alert?
For some time now, RWR Real Estate has
been offering prospective buyers a ‘fast
alert’ system to advise them of properties
we’ve listed.
It provides them with information, the moment
the property comes onto the market - often a
while before it is advertised.
If you’re interested in being on the fast alert
system, all you need do is give us your email
address and let us know the price range you’re
interested in and if there’s any particular
localities that you might have a preference for.
By being advised you ensure you don’t miss out
by failing to notice an advertisement and you
can be among the first to inspect a property
that might be of interest to you.
Is it a good time to invest in property?
One of the really attractive aspects of
investing in property in Perth is that
the vacancy rate remains remarkably
low. It is sitting on 1.9% having risen
from 1.8%
Investing in property based roughly on
Perth’s median price is likely to give you a
yield somewhere between 4.5% and 5.5% and
we believe, the potential for long term capital
growth is looking pretty good, made even
better by the low interest rates available at
present.
According to figures provided by RP Data,
Perth’s median weekly rental price for houses
rose to $504 over the course of 2012. That’s
an amazing increase of 13.1%.
We’re not expecting property prices to run
gangbusters this year but there’s little doubt
that overall, it’s on the rise.
The median rental price for units is $440/
week, having risen by 10.8% over the course
of 2012.
The national average for the capital city
median rent is $469/ week for houses and
$436/ week for units.
time, when rental levels did not increase.
Nevertheless it is still tough for tenants to
find good tenancies and we can assure you
that whenever we advertise a vacancy we
readily fill it.
The tempo in the rental market slowed a
fraction in the last quarter with the number
of people attending home viewings reducing
and the last quarter was the first for some
There’s likely to be a few hiccups during the
course of the year what with the distraction
of the Federal election, and some overseas
concerns, but the shortage of properties on
the market technically constitutes a seller’s
market and that can only mean price rises.
So, you’d have to say – a good time for
property investment – good yield and good
potential for capital growth.
‘Don’t forget – ‘get lucky’!
Our commitment to saying thank you to anyone who refers
business our way will always be appreciated.
Our means of saying thankyou to someone who refers someone wanting
to have their investment property managed by us or having a property that
needs to be sold is a $200 voucher for spending at a local business.
Mark Robinson
Licensee Principal
0409 923 112
Mark Wellingham
Director
0412 928 833
Frank Rousset
Associate
0419 941 221
Michael Edwards
Senior Sales Consultant
0405 345 907
Scott Robinson
Property Assistant
9474 6899
Kate Connolly
Property Dept Manager
0411 306 655
Simone Moll
Senior Property Manager
9474 6899
Kirsty Ashcroft
Property Manager
9474 6899
Andrea Balfe
Administration/Reception
9474 6899
Denise Sharbanee
Auctioneer
9474 6899
RWR REAL ESTATE
Licensed Real Estate Agents
Suite 5, 53 Angelo Street
South Perth WA 6151
Tel: 08 9474 6899
www.rwr.com.au
Media Support Services 1300 557 660
MEET THE TEAM
Please feel welcome to contact us on 9474 6899 or visit rwr.com.au