Semi-rural suburbs like Baldivis and Ellenbrook on the Perth metropolitan periphery are providing first-home buyers with an opportunity to get a foot in the door, as the city's rental crisis deepens.
October rental vacancy figures released by SQM Research show a vacancy rate of just 0.6% in Perth, suggesting a chronic shortage of rental accommodation and fierce competition among tenants.
According to the November market report from valuers Herron Todd White, as a result of the ongoing pressure in the rental market and with rents in the Perth metro area up 14% over the past year, “many renters are weighing up the extra cost for owning their own home as against renting, as the differential between rental and mortgage repayments narrows”.
The November report has as its theme “Far-flung suburbs and their performance” and says properties in peripheral Perth suburbs “can provide good value for an owner-occupier seeking rural living”.
“Based on the current rental situation across the Perth metropolitan region, it is anticipated that many renters will make the move to home purchase and trade off the travel times and costs associated with living near the Perth periphery.
“As rental properties are in high demand at present, there is limited supply coming on to the market and the recent interest rate drop means Perth is beginning to look like a buyers’ market for the beginning of 2013," says the valuation firm.
However, Herron Todd White says periphery suburb buyers – primarily first home buyers – must trade off accessibility and mobility by for affordable homes in new developments.
“Peripheral suburbs are traditionally characterised by larger master planned communities conducive to these markets with schools and community centres within close proximity and appeal largely to young families.
“However, buyers need to weigh up this lifestyle with the prospect of low capital growth attributed to strong continual supply of land and lighter infrastructure and amenity surrounding the area,”
According to Herron Todd White, Baldivis, a semi-rural suburb 42 kilometres south of the Perth CBD is catered towards families, first-home buyers and commuters.
Based on Real Estate Institute of Western Australia (REIWA) statistics, the current median house price for Baldivis is $429,000 with the suburb consisting predominately of free standing, single storey residential dwellings.
New house and land estates in Baldivis include Avalon managed by Terranovis, which is offering house-and-land packages on 600-square-metre blocks for under $400,000.
Herron Todd White also picks the “quiet, isolated” suburb of Ellenbrook situated around 24 kilometres north east of Perth.
There are no major train lines connecting the suburb, but Herron Todd White points out that it has been designed and developed as a self-sustainable community, with each phase of development replicating a different “village” characteristic.
“Primarily, the suburb comprises detached, single-storey residential dwellings with pathways and cycle paths linking the suburb together.
“REIWA statistics indicate the current median house price in Ellenbrook is $387,000 with a strong number of first home buyers purchasing in the area.”
Ellenbrook is being developed by the LWP Property Group, with stage 8 in its Lexia development (pictured) recently released following strong sales.
Traditional home sites ranging in size from 392 square metres to 761 square metres are priced from $199,000, and cottage home sites ranging in size from 300 square metres to 320 square metres and priced from $170,000.
House prices start from $167,000 for a four-bedroom single-storey house.