Brock Gurr, the Principal and General Manager of Summit Realty, shares his thoughts on the local property market. With Summit Realty’s 50 years in Rockingham, being part of the Summit Homes Group and with a wide portfolio of businesses in his portfolio, Brock brings a balanced insight into all aspects of the property industry in Perth’s south.
Real estate
We all know that the average Perth property value is continuing to break records. However our local suburbs still provide great value and continue to be a target for eastern states investors. Whilst improvement in the rental vacancy rate and stabilising rental values normally leads to the same for sales values, with the upcoming government investment and new jobs for our area, combined with continuing lower sales listings compared to previous years, it’s hard to say that this will be the case any time soon.
The pressure is starting to come out of the rental market due to affordability issues, leading to people to house share or children moving back to the family home, along with increasing new home completions releasing rental stock. Investors have also converted owner occupied homes into rental stock.
Short stay rental accommodation owners are being incentivised by the state government with $10k to switch to long term rentals, plus owners of homes that have been vacant for more than six months offered $5k in the latest state budget. Our property management team has been running the numbers for owners, comparing a consistent, lower rental income with a cyclical higher rental income, plus factoring in the grant.
Our sales team just had one of its strongest months, which was a pleasant surprise for the middle of winter and we now turn our attention to the traditional uplift for spring. My advice is to get onto the market as soon as possible now, with fewer listings driving competition between buyers.
Strata
We have seen an increase in the willingness for buyers to purchase a strata property due to two factors; the surge in property prices highlights the great value that a unit provides and the growing professionalism of strata managers giving buyers confidence to purchase in a strata complex. We have noticed the increase in self-managed strata complexes changing to using a qualified strata manager. Outsourcing what can be a political and unthanked position plus knowing the myriad of strata laws underpins this.
Retirement
There has seen an upsurge in retirees cashing in on rising property values and moving into our two retirement villages, Rockingham’s Springfields Village and Kingsley Lakeside Village. With large amounts of equity in their family homes, they are able to transition to a fully maintained unit and release money that has been locked away.
New homes
As part of the Summit Homes Group, we know first-hand that construction timelines have reduced but there is still a shortfall in the number of new homes required to house our growing population. The sector is still performing strongly and Baldivis remains a key area for the Summit group.
Land
Land is still at a premium, with many sales occurring before the release hits the open market. According to UDIA WA, land values have increased close to 10% over the last 12 months, after plateauing for the previous two years. There are still large tracts of land in Baldivis to be released but to meet the current demand, developers’ uplift in activity needs to continue along with an improvement in the timing of titles.
Granny flats
With the recent removal of planning requirements for compliant granny flats behind an established house, the demand for these has increased. With the additional rental income stream potential, we work closely with the Summit Granny Flats division to provide income projections.
Although government incentives are trying to improve the rental market squeeze, a strong local economy, lower property values than Perth and improving local infrastructure will continue to draw population and investors and continue to push house values, but probably not at the record speed of the past 12 months.
As published in The Sound Telegraph on Wednesday 21st August 2024.
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