If you can believe today’s West Australian house prices in the South-west of Western Australia have bottomed out and are expected to make a small 1.5 to 2.0 percent increase in in value through 2013. It seems property prices from Australind all the way around to Denmark, including the (previously) much sought after Dunsborough, have hit bottom and are resting at late-2005, early 2006 prices.
In the example given (on page 13) a Dunsborough property valued at $599,000 in 2006, peaking at $799,000 in 2008, is now back to the 2006 value of $599,000. This means this property has lost $200,000 since its peak in 2008. That is a loss of a whopping 25 percent!
But the good news is that, according to this particular article anyway, the roller-coaster ride is over for South-west properties and prices have now stabilised at 2006 levels.
So, assuming this forecast is right and prices have bottomed and will start a very slow crawl back up from here, then this is the time to get into your holiday property in the South-west. Depending on where and what, you can pick up properties that are now over 30 percent below their 2008 valuations. And there are a lot of properties for sale.
The bad new is that nobody is expecting property prices to perform at 11 percent per annum any more like they did between 1995 and 2008. The expectation is that property will perform at about half the rate of a three year term deposit for the next five years at least. Assuming this holds true (and seriously, who actually knows what is really going to happen) then property in the South-west could be expected to increase in value at around 2 percent per annum—assuming, that is, that it has hit bottom