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Are You “Keeping up with the (Perth) Joneses?

 Property is king in Australia, and a lot of our identity is wrapped in our homes.  

Financial Framework Are you keeping up with the Jones's image.jpgJust like the old comic strip that created the saying, we also focus on “Keeping Up with the Joneses.” The saying that has lasted much longer than the comic strip from the early 1900s refers to the fact that we compare ourselves to our neighbour, using them as a benchmark for the accumulation of material goods.

Whether or not the neighbour’s name is Jones, we compare our home to the house next door, along with our car and other material possessions. 

Keeping up with the Perth Joneses and Average Property Prices in Perth

We aspire to “have it all,” but what does that mean? How do we “Keep up with the Joneses?” Does it mean having a bigger house and a better car? And how do you know when you’ve achieved “having it all?”

Here at Financial Framework, we encourage you to aspire to your goals. But “having it all” should be about your own personal goals and what’s best for you and your family. It should also align to your income

When you compare your house to your neighbour’s, are you able to look at it objectively enough to determine if you are keeping up? By looking at the average property price in Perth, you may find out that you are “The Joneses.”

As you look at this analysis, remember that these are averages and provide a rough guide to house prices in Perth. Don’t be alarmed if you’re above or below the averages.

House Prices in Perth

Everyone says that the value of property goes up, and while over the course of time that can be true, it is not always the case. Prices can change dramatically depending on the current market situation, supply and demand and what’s happening in the area.

According to Domain, Perth house prices are at three year high with the strongest annual growth in six years. The reason for this growth can mostly be attributed to people returning home to Perth due to loss of jobs interstate or overseas as a result of the Coronavirus pandemic. This is either forcing tenants out to look for new rentals, or these recently arrived expats looking to buy or rent here in Perth. 

Other factors influencing prices include the state and federal grants and incentives available to home buyers, the record low interest rates currently available and optimism in the economic outlook.

Real Estate Institute of WA president Damian Collins has predicted that a house price growth of between 6 and 10 percent is likely in 2021. House prices in Perth are set to rise faster than any other Australian capital city in 2021. 

 Average Property Price in Perth 

At the moment, the average property price in Perth is $563,214 for houses and $347,585 for units [1].

And while this is likely to pick up, some areas are certainly on a stronger growth trajectory than others.

According to REIWA, these are the highest growth suburbs in and around Perth:

Suburb

Value change Mar 2020 - Jan 2021

Median dwelling value 

Medina

15.2%

$252,877

Calista

12.2%

$253,510

Burswood

12.1%

$585,941

Leda

11.8%

$308,855

Orelia

11.2%

$262,633

Lakelands

11.1%

$421,471

Kinross

10.7%

$531,459

Eglinton

10.7%

$412,037

Heathridge

10.5%

$496,558

Bertram

9.7%

$362,184

 

You can see how your suburb rates on the REIWA website and find out just how you compare to the Joneses.

Looking at current Perth wealth another way, here are three different neighbourhoods in different price zones:

  • Greenmount, which has a median house price of $470,000, has seen growth in the last 12 months of 13.00%.
  • Coogee, which has a median house price of $776,500, has seen growth in the last 12 months of 7.10%.
  • East Fremantle, which has a median house price of $1,200,000, has seen growth in the last 12 months of 5.00%

With those kinds of growth rates, it can make you wonder about your house, and how you can take advantage of the current situation. Of course, it’s not just about the average value of your Perth based home or its potential growth over the next couple of years. Nor is it all about what everyone else is doing, including the neighbours.

If you’re nearing retirement, or at the middle of your career and making plans for the future, you may be curious about how your home fits into your plans. You might be wondering if you should keep wealth tied up in property, with circumstances making Perth a seller’s market.

More important than keeping up with the Joneses, here are some of the key questions to consider:

  • Is your home still right for you and your family? 
  • Does the mortgage fit with your income? 
  • Should you be paying more into your mortgage with rates so low? 
  • Or should you be looking at other areas to direct your household income?

We discuss all of these questions and more for you in our complimentary download - The Ultimate Guide to Super V Mortgage. Grab yourself a copy now.

 Mortgage vs Super eBook.jpg

 

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