2009 was the year for first home buyers and 2010 will be the year for property upgraders in the northern suburbs.
Because of the first home buyers boost, property values in lower to mid-ranged priced areas in the northern suburbs stabilised during 2009 while at the same time higher prices areas continued to undergo a market correction.
In Sorrento for example, the median house price fell by around
8 per cent during 2009 while property values in the more affordable inland suburb of Greenwood rose by around 2 per cent. As a result, the gap between lower to mid ranged properties and higher priced properties in the northern suburbs has shrunk and it is now much more affordable for property buyers to upgrade to a more expensive home especially near the coast.
The Peard Real Estate Group expects growing demand for homes during 2010 in suburbs where the median house prices is above $600,000 such as Trigg, Sorrento, Hillarys, Mullallo and
lIluka.
An improving state economy, falling unemployment rates and
rising wages will give buyers confidence to take out larger home loans to purchase homes in these prime suburbs which over the long term have proven to deliver high rates of capital growth for property owners. This trend is already occurring with Peard experiencing a sharp fall in property listings for lower priced properties in these prime suburbs over the last two months.
Falling stock levels is traditionally the first indication of an upswing in property prices over the median term. The lower end of the housing market in the northern suburbs should be underpinned by a greater activity by property investors.
While vacancy rates have increased in recent months, Peard
believes this is only a temporary trend and demand for rentals will surge during the later half of 2010 as more people move to Western Australia in even larger numbers due to the commencement of major new resource projects such as Gorgan.
Falling vacancy rates and rising rents during the second half of 2010 should encourage more property investors to purchase homes in the sub $500,000 price range with suburbs such as Craigie, Heathridge, Padbury, Beldon, Greenwood, Warwick and Marangaroo benefiting from this trend.
Overall, The Peard Real Estate Group is predicting that property values in the northern suburbs should rise by around 10 per cent during the coming year which is in line with historic price growth rate trends in property values over recent years.