Property 2011 --- Perth Today Tonight
Reporter: Mark Gibson
Down, down, down. Perth property prices are collapsing. When Dane and Joanna bought their Seville Grove home, they never dreamed its value would disappear before their eyes."You always expect to make money on an investment not to lose money." In 2006, the couple paid 370 thousand dollars for the four bedroom, two bathroom house. They spent almost 25 thousand on the backyard, a patio and a spa. Four and a half years later, it's on the market for 349 to 359 thousand - less than what they paid for it. "Probably stand to lose 40 grand plus the interest we've paid over the years." Joanna says "Definitely consider it to be a bargain especially considering how much we paid for it only four years ago."
"There are bargains, no doubt about it, if you look carefully and even not so carefully you can find some pretty good buying." Real estate agent Greg Rossen says forget trying to sell your home within weeks.. it's now taking months.
"The average time is 71 days but that belies the real truth that people have had their property on the market for 6 months and there's even some that have had a birthday, 12 months, horrible facts but true."
Figures out today have confirmed Perth as the worst performing city in the country.
In December, the median house price fell another 0.6%.
In the last 3 months of 2010 the drop was 1.9%.
Over the whole year, Perth suffered a 1.5% fall..
while nationally, prices ROSE 4.7%
Four years ago, Janine MacLeod paid 520 thousand dollars for her Mount Lawley unit. "I put it on the market almost 3 months ago at 640 which was considered to be the market price." But Janine's had to slash the price by 40 thousand dollars. "So we've put it down to 599, it's from 599, so I'm hoping that perhaps that will appeal more to more people."
Janine's made an offer on another place, so she needs to sell. "Two bedrooms, a bathroom, a powder room and also a separate study and as you can see it's got this beautiful view. -Stunning isn't it? -It is it's a beautiful view."
It's not hard to see why prices are tumbling.. there are too many for sale signs and not enough buyers. In fact, right now in Perth there are 5,000 more places on the market than this time last year.
"There's currently almost 16,000 properties for sale, equilibrium's about 12,000 properties so a lot of properties on the market." Greg Rossen says if you're selling your home you need to be realistic. "If you're not prepared to accept that the market prices are lower than they were, perhaps even going back to 2007, take your property off the market, listen to your agent's advice, possibly rent it out and find a different solution because flogging a dead horse just simply won't work if there are no buyers at the price you're hoping for."
It's a buyer's bonanza. On average, properties are being reduced by 6 per cent.. the more money you've got, the more you can save.
This Dalkeith mansion listed for 5.6 million dollars last January.
It sold for 4.15 million - almost one and a half million off the price, or 26%.
An apartment in this Crawley complex was listed for 2.28 million.
It sold last month for 1.78 million - a 22% discount.
And this Nedlands home was reduced from 2.6 million dollars, to 2.15, down 17%.
"Buyers do your homework, have a really good look around, speak with the agents who can tell you what properties have sold for, do your own research on the available data bases and shop with a sharp pencil." Since the real estate peak in October 2007 there's been no real growth. So, what's the hot tip for the rest of 2011?
Greg Rossen says "It's going to remain very much a buyer's market and we don't expect there to be any significant capital gain and we're hoping in fact the reverse doesn't happen where prices are eroded and prices decrease, time will tell. Could things get worse before they get better? -They could indeed."
That's not what our anxious sellers want to hear.. they say they can only cut the price by so much. "Definitely prepared to negotiate keen to make a sale but obviously you don't want to lose too much money in this market as well."And if you're buying. Greg Rossen says "Be guided by the real estate agent but above all don't be afraid to put an offer in."