Perth Data for the Quarter Ending July 2014
#1 Secret Harbour Houses 6173 * 5.27% pa. 0.89% 7.92% 2.41% 9+ %pa. 8+ %pa. Sale Count 90 Median Value $501,500 5 years 8 years Median Rent $500 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 5.22% #2 Wellard Houses 6170 4.97% pa. -4.34% 10.86% -1.31% 10+ %pa. 7+ %pa. Sale Count 31 Median Value $490,500 5 years 8 years Median Rent $475 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 5.05% #3 Tapping Houses 6065 * 9.06% pa. -3.64% 10.60% 3.87% 9+ %pa. 7+ %pa. Sale Count 59 Median Value $545,500 5 years 8 years Median Rent $520 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 4.97% Onthehouse.com.au 1
#4 Aveley Houses 6069 ** 5.63% pa. -4.71% 3.15% 1.30% 7+ %pa. 7+ %pa. Sale Count 49 Median Value $517,000 5 years 8 years Median Rent $475 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 4.79% #5 Waikiki Houses 6169 5.90% pa. -7.45% 12.61% 8.04% 8+ %pa. 7+ %pa. Sale Count 80 Median Value $415,000 5 years 8 years Median Rent $405 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 5.12% #6 Ridgewood Houses 6030 6.86% pa. -3.06% 10.13% 1.82% 9+ %pa. 6+ %pa. Sale Count 29 Median Value $448,000 5 years 8 years Median Rent $440 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 5.13% Onthehouse.com.au 2
#7 Darch Houses 6065 ** 7.97% pa. -6.99% 13.38% 1.60% 7+ %pa. 6+ %pa. Sale Count 25 Median Value $629,500 5 years 8 years Median Rent $575 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 4.78% #8 Joondalup Houses 6027 ** 7.64% pa. 0.54% 5.85% 7.34% 7+ %pa. 6+ %pa. Sale Count 33 Median Value $570,500 5 years 8 years Median Rent $500 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 4.56% #9 Caversham Houses 6055 8.54% pa. -3.34% 2.73% 6.43% 9+ %pa. 6+ %pa. Sale Count 13 Median Value $454,500 5 years 8 years Median Rent $440 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 5.05% Onthehouse.com.au 3
#10 Kinross Houses 6028 6.24% pa. 1.38% 4.97% 4.45% 7+ %pa. 6+ %pa. Sale Count 41 Median Value $533,000 5 years 8 years Median Rent $510 /wk Jul 14-Aug 19 Jul 14-Aug 22 Rental Yield 4.98% Onthehouse.com.au 4
Definition of Terms Term What is it? What does it tell you? Median Value Every quarter, Residex calculates a value for every property in its database. The middle value is found (i.e. middle number when all the values are arranged in order), which is the median value. The median value tells you straight away what a typical house is worth in an area. By knowing the cost of a typical property in the area, you can tell fairly quickly which areas you can realistically afford to invest in. Number of Sales The number of sales figure is the number of sales we receive over a time period from the government after we have taken out any sales that are too high or too low to be useful. In areas where we have not yet received all that quarter s sales from the Government, we have published an approximate number of sales. If there is a high number of sales in an area, this tells you: a) That the area is fairly busy and sees a lot of sales activity b) How confident you can be in the Residex figures, because the more sales we have, the more data has been used to calculate growth, medians and other data. Median Rent Capital Growth The median rent is calculated from various sources of weekly rental information such as newspapers and the internet. The capital growth is the growth in house prices over a period of time. It is sometimes quoted for the latest quarter, and sometimes the average is given for the last 10 years. The median rent tells you the typical amount of rent per week you can expect to earn in an area. The capital growth is the amount by which your investment grows in value. By following the growth in an area, you can find out what your property should be worth or how an area is performing. Rental Yield The rental yield is the amount of rent you can expect to receive in a year, expressed as a percentage of a property s value. Unlike capital growth and total return, which are quarterly figures, rental yield is an annual figure. Note: Users should exercise caution when evaluating very high or very low long-term average yields. The rental yield gives you an idea of how much rental income you can make in an area. For example, if an area has 5% rental yield and a property in that area is worth $500,000, then you should be able to make $25,000 ($500,000 x 5%) worth of rent in a year or approximately $480 a week. Total Return A combination of both capital growth and rental income. If you have been renting out your investment property, the total return figure tells you what your return is from both the growth in house price plus the cash flow from the rental. Star Rating System Residex quantifies the risks associated with the ability of investors to achieve the predicted growth and rental returns of each suburb by assigning a comparative risk score to each suburb. The star ratings are a simplified way of expressing these scores. It is possible for one suburb to have a higher star rating than another suburb that presents a comparatively higher rental yield and/or growth estimate. Similarly, neighbouring suburbs with similar rent returns and growth estimates may have different star ratings. Two, three or four stars reflect the relative degree of confidence that Residex has in the forecasts being achieved or exceeded, based on the information we have been able to obtain from our analysis and research. Four stars mean that the suburb is ranked in the top 25% of risk scores obtained. In other words, it is ranked in the quarter with the lowest risk. Three stars means the suburb is ranked in the next 25% and so on. Onthehouse.com.au 5
The Residex Predictions Model The Residex prediction methodology is also unique. How did we work out what the market is likely to do over the next 5 or 8 years? We started by gathering a lot of information. The Residex statisticians used Melbourne as a good base model and collected information going back to 1901 to analyse how Melbourne had performed over a long time period including the Great Depression, two World Wars, and many other events that could have had a bearing on the housing market. From this century-long series, it became clear that, no matter what was going on in the world, the Australian property market moves in noticeable trends and cycles. Residex then investigated lots of different factors to see what their bearing was on the property market: interest rates, inflation, employment levels, population, bank bill rates, etc. By combining the results of these studies with our understanding of past trends and history, we were able to develop the Residex predictions. We have been producing predictions since December 1994, and we are constantly refining them to increase their accuracy. For many years, they have proved to be very good indicators of the property market. Disclaimer Neither Residex Pty Limited nor any of their employees gives any warranty that any value you determine from our data or investment area selected will be correct. Residex Pty Limited believes the statements, recommendations, calculations, data and graphs contained herein to be correct and not misleading but we give no warranty in relation thereto and we expressly disclaim any liability for any loss or damage which may arise from any person acting or deciding not to act partly or wholly on the basis of any such statements, recommendations, calculations, data or graphs. All information contained in this pack is subject to normal copyright laws in favour of Residex Pty Limited. No information contained in this report can be copied or used for any purpose other than for the purpose for which it has been provided: namely, to assist the purchaser in establishing an appropriate investment area in Queensland and the Northern Territory. Photostat copying of any part of this report without the consent of Residex Pty Limited is specifically prohibited. WA Data: The information in this report is based on data supplied by Landgate (Western Australia) and while every effort is made in its compilation, the institute does not accept any responsibility for the accuracy or completeness of the information or its suitability for any purpose. www.onthehouse.com.au Onthehouse.com.au 6