TOP FIVE AREAS TO BUY A PREMIUM HOME  IN PERTH

There has never been a better time to upgrade your home by purchasing a property in a premium suburb of Perth according to Corrado Cusma, Managing Director of OrangeTee Real Estate.

Mr Cusma said that the price differential between middle and upper priced homes in Perth had shrunk significantly over the past year.

”One year ago you needed to borrow more than $500,000 to purchase a home in a premium suburb of Perth after selling a mid priced property. Today the price differential between an average mid priced property and premium property in Perth has fallen by more than $250,000.

”For example, one year ago, the median price of a home in North Perth was around $700,000 while the median house price in South Perth was nearly $1.3 million, representing a price differential of $600,000.

”Over the past year, the median price of a home in North Perth has grown by 5.6% to $760,000 while the median house price in South Perth has fallen over this time by 21.7% to $1.0 million thereby giving a price differential of just $340,000 between the two suburbs. Therefore, the median price differential between these suburbs has fallen by around $260,000 over the past year.

”With the cost of borrowing money also falling significantly over the past year due to lower interest rates, the cost of upgrading to a prime suburb is now at its most financially attractive in several years. OrangeTee Real Estate is now finding strong demand for properties in higher priced suburbs in Perth from buyers who have recently sold a mid priced property in other parts of Perth.

”One of the major financial benefits of the buying a home in a premium Perth suburb is that strong rates of capital growth properties in these suburbs achieve over the longer term.

”City Beach is a classic example. Over the past year, the median price of a home in City Beach has fallen by 13.2% to $1.65 million. However, over the ten years, the average increase in the median price of a home in City Beach has increased by 13.4%. This compares to an average annual increase in the price of a Perth home of 11.5% during the same ten year period.

”Astute property buyers should now use the current window of opportunity to upgrade to a home in a prime Perth suburb. Property buyers should identify well located pockets in these suburbs where there are currently a lot of properties for sale and therefore greater pressure on property sellers to find a buyer.

”Buyers should also ensure that they have pre-approval finance which will enhance their negotiating position when they decide to make an offer on a property.” he said.

Mr Cusma highlighted the following five prime suburbs where properties where currently undervalued because house prices had significantly underperformed during the past year compared to the long term capital growth rates achieved by these suburbs.

                       TOP FIVE PREMIUM SUBURBS  TO BUY A PROPERTY

 Suburb                % Price Growth Rate Past Year     Annual Price Growth Rate
                                                                                          Past 10 years

South Perth                      – 21.7%                                          12.4%

City Beach                       -13.2%                                           13.4%

Jolimont                           – 19.5%                                          12.3%

Salter Point                      -15.2%                                           12.9%

Cottesloe                          -9.4%                                             14.2%

Source: REIWA