Houses prices up, but some investors are still taking big losses in Geraldton’s Real Estate market.
Geraldton house prices have jumped 15.4 per cent since last year — the third-biggest annual rise in regional WA — but have fallen short of the giant leap investors are crying out for, with some still taking six-digit losses “on the chin”.
Meanwhile, the local rental market is still uncertain and tight for prospective tenants. While the vacancy rate has improved slightly, an insider says recent changes — easing from one per cent to 1.3 per cent in three months — will be inconsequential to those desperately seeking a lease.
Real Estate Institute of WA figures show Geraldton’s March median house price hovered just below $300,000 — $50,000 higher than the March 2020 figure and a 3.4 per cent rise from the December quarter.
Listing numbers appear to be stabilising, with only 3 per cent fewer houses available in the March quarter than in the December quarter, although still 43 per cent lower than recorded in March 2020.
Geraldton Property Team sales executive David Potiuch said this balancing of supply and demand was due to a surge in people looking to sell, rather than a fall in homebuyer numbers.
Geraldton property prices fell dramatically towards the beginning of the last decade. He said people who invested at the peak of the market were looking to capitalise on the new-found interest in the region and sell their properties, despite many still taking a loss.
For example, Mr Potich has a Spalding house on the market for $169,000, for which the owner paid $280,000 in 2008.
“People are just happy cashing in and taking the loss on the chin,” he said.
He said demand was still very high, with a “mixed bag” of enthusiastic and competitive sales activity behind the price rise, including investors looking to strike while the iron was hot, new arrivals buying instead of renting, and locals — disheartened by the tight rental market — looking to buy.
He doesn’t expect the figure to stop climbing any time soon.
“The way I see it, this is a very undervalued coastal town,” he said.
The Mid West city is the cheapest regional centre for homebuyers, with the average home in Kalgoorlie $15,000 more expensive, and properties in Karratha $170,000 pricier.
In the rental market, Geraldton’s vacancy rate is up for the second month in a row after hitting an all-time low of one per cent in January, but REIWA Mid West Gascoyne chair Peta McKenzie says the changes are too “marginal” to celebrate. “That’s likely only one or two extra properties across the Mid West,” she said. She said pressure would ease once the figure reached closer to 2 or 2.5 per cent and she was hopeful the market would find balance once new builds became available.
“We’re still looking at a 12-month forecast of having new builds becoming available,” she said.
Ms McKenzie also said the end of the moratorium on rent increases and evictions would lead to more breathing room in the housing market.
“We’re still not even a month into COVID-19 regulations (being) relaxed,” she said. “The hope is, another two to three months down the track, things will open up further.”
Last month, Regional Alliance West criticised the move to end the moratorium, saying it could force Geraldton’s vulnerable residents — already hit by the rental squeeze — into crisis accommodation or homelessness.
Despite calls for the State Government to repair boarded-up social housing stock in Geraldton, the Department of Communities claimed only 73 of the city’s 974 public homes were vacant.
Executive director of service delivery Lindsay Hale said the department was aware of the demand for social housing and was working to return the vacant buildings to a “safe lettable standard as quickly as possible”.
He said 60 of these properties were undergoing work, while just 13 were awaiting allocation for tenants.
“It is anticipated that eight new social housing properties will be constructed in Geraldton ... under the $221 million Housing and Homelessness Investment Package,” he said.
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