Recently, Tim Lawless, the head researcher and writer for analytical firm RP Data was asked by a prospective first home buyer where he would buy his first home if he was in the market today. The result was a great piece on the RP Data blog that provided quick analyses of every state in Australia and used his experience as a first home buyer in 2002 for perspective.
First Home Buyer Survey Results
Recently, RP Data surveyed first home buyers, asking what their most important considerations were for their first homes. The survey was an eye-opener for many because it flies in the face of many industry assumptions about first home buyers and home buyers in general.
The most important factor was affordability, followed by number of bedrooms, off street parking (with or without garage), capital growth and proximity to public transport. Most real estate agents have assumed for years that a young couple is more interested in proximity to a primary school than any other factor; this is obviously not the case and will probably change how real estate agents sell houses.
Lawless Recommendations for Perth Market
Lawless recommends that budget and potential for capital growth should be the first two factors. He sees a detached home in an area with potential for appreciation in value as the two most important considerations and is more enamoured with proximity to work and entertainment than number of bedrooms or size of backyard.
Lawless makes his picks based on a 20% deposit. While Perth market housing prices are 6.9% higher than a year ago, they have actually fallen 0.6% over August, September and October of 2013. Since January 2009, the rise has only been 8.5%, meaning that Perth has been a somewhat stable market.
The median value of a house in the Perth market is $508,000. The average WA first home buyer loan, according to ABS, was $315,300, which means the average first home prices is $380,000. In Greater Perth, there are 29 suburbs whose median house values are $380,000 or below.
Lawless’ first choice is Lockridge, with a median house value of $353,700. Out of 59 houses bought there in the last year, 78% have cost less than $400,000.
For information about other advantageous suburbs, call (08) 9472 9766 and talk to our mortgage brokers and financial planners in Perth.