Interest rate cuts, the return of first home buyers to the market and a strong property management division were key reasons Western Australian based ACTON Group has recorded strong results for the 2011/12 financial year, a senior executive has said.
According to ACTON Managing Director Graeme Baxter the company saw an improving trend beginning last October, with the trend continuing into the first half of 2012.
"Sales for the last six months of the financial year were 22 per cent higher than those recorded in first six months, while sales for 2011/12 were 25 percent higher than the previous financial year,” he said.
"Over the year we've seen excellent improvements in all regions, but the most growth has been in the top end of the market.
“Sales for ACTON Cottesloe were 94 percent higher for January to June 2012, than for July to December 2011. ACTON Applecross and ACTON Dalkeith respectively recorded improvements of 40 percent and 33 percent over the same period.
“It was also encouraging to see sales improve significantly in the South West."
Mr Baxter says a range of factors have boosted market conditions over the last 12 months.
"We've had several interest rate cuts, and while the banks might not have passed on the full amounts, they have provided mortgage holders with some relief. Potential borrowers also feel more confident in their ability to repay a mortgage," he said.
"We've had first homebuyers return to the market and this in turn has flowed on to trade up buyers, all the way to the top of the market.
"Plus prices have adjusted to meet the market and buyers are seeing good value, particularly in the premium suburbs where there have been some major adjustments since the GFC. Buyers in these areas can find some stand out value and are acting accordingly.
"Overall, listings have fallen across Perth, and we are seeing the end of the buyer's market. If conditions remain the same I'd expect to start seeing some modest price growth over the next six months."
Property management has also performed well over the financial year.
"We have a low vacancy rate and strong demand, which is pushing rents up between five and 10 per cent in some areas. As a result we are seeing more interest from investors who are motivated by good prices, low interest rates and rising returns," said Mr Baxter.
Improving returns are being seen across the market. Some recent examples include a four bedroom, two bathroom house in Mindarie which sold for $780,000 and rents at $995 per week with a gross return of 6.63 per cent.
In Rockingham a two bedroom, one bathroom unit sold for $215,000 and rents for $260 per week with a return of 6.28 percent.
At the higher end of the market a Claremont property sold for $1.652 million and is on the rental market for $1995 per week, providing a potential return of 6.29 percent.
In terms of rent increases, in the Western Suburbs, ACTON Dalkeith reports that in the last month a four bedroom, three bathroom home in Mount Claremont was $1,000 per week and is now $1,350 (35 per cent increase); a five bedroom, three bathroom property in Nedlands was $1,400 per week and is now $1,650 (17.86 percent) and a four bedroom, three bathroom house in Shenton Park was $1400 and is now $1750 (25 per cent).