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Property welcomes share drop

SHARE price corrections spell good news for the WA real estate market as investors return to bricks and mortar security according to Geoff Baldwin Team managing director Geoff Baldwin.

He said history could repeat itself when the share market collapse in 1987 was followed by a surge in real estate investment in Perth.

“During 1988, Perth real estate values increased by over 40 per cent in twelve months as people moved from the stockmarket back to real estate investments.

However, 2000 probably doesn’t hold the promise of returns of quite the same magnitude as 1988.

“A strong shift from stockmarket investment to real estate investment could see the median house price in Perth rise by another 10 per cent during the remainder of 2000.

“Now is an attractive time to invest in real estate because of rising property and rental values.

“The Perth real estate market has performed solidly in recent times with the median Perth house price increasing by 5.2 per cent during the year to $149,000.

“The real estate market could have increased even more strongly but many first time investors were attracted to the stockmarket as a result of the huge publicity of the first Telstra float.

“These families will now be re-assessing their future investment plans and history shows they will gravitate to real estate which is viewed as a more secure investment for the long term.

“The rental vacancy rate in Perth is still very low at 2.9 per cent and the median rent for a four bedroom house increased by nearly 10 per cent last year to $203 per week.

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