You're listening to The Perth Property Show, Australia's only weekly property podcast by West Australian experts for West Australian listeners. Catch your latest episode every Monday at 7am. Good morning, everyone. Welcome to The Perth Property Show. My name's Trent Fleskins, your host. As always, this week, we have one of the absolute stars in property in real estate in Western Australia, Shane Beaumont, back in the studio.
He's been in a couple of times to the podcast and specifically talking about his favorite suburb to sell in Gosnells in the southeast of the Perth metro area last time he was in it was about two years ago episode 168 for anyone looking for a reference to go back and check that one out because today we are doing a suburb update on that suburb Gosnells to see just how correct Shane was and I reckon is pretty correct and just how far we've seen those prices move and
in what housing type we've seen the most movement. Was Shane right about those villas that were selling under replacement value? How have the development blocks gone? How have the family homes gone? We'll talk today about how that performance has run, why, where it's come from and where it's going. Shane, how are you going, mate? Great to see you. Hey, it's been a killer couple of years for you in Gosnells, hasn't it?
I think we were pretty spot on in the timing of showcasing Gosnells because from that point in time, possibly just a little bit before, we really have seen a run on Gosnells from across the country, haven't we? Yeah, without a doubt. And I think when you look at the, it's probably starting to shift a bit more where local buyers Buyers are starting to realize the council's got some great things happening.
Logistically, it's not far from all amenities. So a lot of the local buyers are catching on to it also, but it probably took those eastern states investors looking at probably a snapshot of where they live and what that same sort of property would be priced in their state for them to come and see the value it was on offer there. So we've spoken a lot about the East Coast investor over the last couple of years.
Would it be fair to say that it really has been the East Coast investor that's driven the baseline of price growth, I guess, coming from a recognition, I guess, coming from a place without any bias, a lot of West Australian bias about the Gosnell's property market, And then specifically looking from their point of view, maybe their own bias of the East Coast and just recognising massive value in that area. That's obviously been the driver, I think. Has it sustained or are we really
starting to see a changeover in the buyer profile? far? We've definitely, I think they definitely started it. We were really pushing a lot of these properties to local buyers for a long time now, saying there's a great buying.
In fact, when we spoke on that podcast, I was saying to locals, look, step back, take the name of the suburb or what your preconceived ideas are, look at where it is, how close it is, what you can do with the properties, and then look at maybe even the Northern Corridor, what they've done with a similar demographics, similar location.
Then you go to a national and look in Sydney, Melbourne, proximity to airport, good infrastructure, train station, schools, all those sorts of things, location to CBD. And when you start to do that and peel it back, sometimes you're so caught up on what has been the market or what's been in the area. And that when you do that exercise, you realize it was way undervalued. And that's what I think. That's why I think it was a poignant time to showcase the suburb.
Back then, I asked you what the median house price was, and your response was $320,000 for a house. What is it now? Now, well, depending on the type of property, but it's sort of 420, 430 now, I probably think that's a bit of a lag effect. And I say that, which we'll go through in more detail. Three by one, full block back when we originally spoke, they were going early threes. If they're half decent right now, half decent, very high fours, early fives.
Renovated, early sixes, high fives. So that's rapid growth. But the reason it has gone so quickly is a lot of people are starting to compete in WA with those investors. But if they got in earlier, which was saying, look, guys, you may as well look at buying this as opposed to renting. And probably to a degree, WA is always, we're late to the party. And I feel that sort of happened in those areas.
I look growing up and I grew up in Gosnells, an area like Willardgy, when I sort of, you look at all suburbs, Willardgy wasn't what it was today. Now, we've just had a subject sale offer on another property sold in Bicton. He's just transacted on his 4x2 on 700 square meters for $1.25 million. In Willardgy. In Willardgy. Yeah. And we showcased that a couple of weeks ago, speaking about that massive price group.
And the reason is, if you look around it, obviously, whether it be Melville, Bicton, you're literally just on the other side of the road. And sometimes those areas get forgotten about. For example, through that South Corridor, I think Osnall's was forgotten about. It's such a big suburb. But Langford at the moment is just next to it. and Langford was always more
expensive than Gosnells. The reality is properties in Langford at the moment are selling for about the same like for like, which is crazy, but there are little pockets people forget about. And Gosnells at the moment definitely got the exposure because the transactions are higher. Over 7,500 properties means the amount of transactions is gonna be a high number.
The locals are finally catching on, which is meaning rather than it being 70% realistically Eastern States investors, it's probably now about a 50-50 of the successful buyer, but the inquiry is still probably higher from the Eastern States investors. Yeah, it's really interesting to see. I assume, therefore, that the mix in Gosnells is pushing more again and again and again towards the investor housing type there. Yeah. You're losing a lot of owner-occupied properties in Gosnells.
We are. And I guess when I'm speaking to a lot of owners and they're saying, oh, I'd really love it to go to a young family, we'd love that too. But the reality is if the investor is willing to pay 30, 40, 50 grand more, it's not that the young family is missing out because we still need somewhere to live. It's going back into the rental pool. When you explain that to them that it's still creating housing for people, they feel at ease.
But I think there's still this sort of preconceived idea that there's the greedy landlord that owns all these properties. A lot of the people buying these properties, eastern states, mums and dads, this may be their first investment. It might be their first purchase. That's exactly right. We've had a few where they can't afford where they live. They're going to rent where they are as long as they're in the market, and they've done really well.
And there's a few that have probably missed the boat, what happened in Sydney or Melbourne, and they don't want to do that again. So they've, I guess, dabbled in WA. The entry-level costs are so much less. So if it does turn at 20%, which we can't see because reality is in most circumstances, when we spoke two years ago, it was back to 14 levels, some 2007 levels. Now we have got the growth. And I also explained to a lot of those buyers, they go, oh, I missed the boat.
I said, well, hang on a minute. If you talk about the last 24 months, well, yeah, you probably could have bought earlier and done well. But let's take it back to 2014. It's been a ferry trip, round trip at that time. Yeah, that's right. So, it's not, again, like that greedy landlord's just cashing out for so long.
People, you know, they're probably underwater as far as what they paid, but it has turned and I can't see that changing purely for the demand and whilst the property's on the market in the whole of Perth, sort of under 4,000, and we'll see that creep up as Australia Day and kids go back to school, but I can't see it being a rapid change, sort of up to 12,000 for quite a while. So, if you do the numbers, we've seen 18% growth over the last two years, year on year, right?
So, 35%, 36% over the last couple of years. Yeah. Can we sustain that in a place like Gosnells with the buyer profile? If most of the buyers are East Coast buyers, I would suggest higher socioeconomic coming down to invest in a place like Gosnells rather than coming from the local area. Yeah. Is that a sustainable number, 18%? Obviously, that is 50% more than the
median of last year. Yeah. Well, if you said to me two months ago and then two months before that, I'm always saying I can't see it staying at this rate. The reality is it is actually moving quicker than that. And as I was saying off air, when I look at some of the sales evidence, I still think- Even if you're looking six, I would say 12 weeks back, it's way irrelevant what's sold. So, when we're selling a big price three months ago, it's only six weeks later,
we're going, wow, looking back, that was a great buy. Why? Just because how quickly it's moved. Why is it moving so quickly in girls' novels over the last three months? And to be frank, you're not the first person to say that. Peter Zambotti and Siobhan McHale, number one agents in their respective suburbs the last two weeks, have both said in the last three months, they've seen another step change.
Yeah. Yeah. I think the education around buyers and looking at what things are selling, detaching from where they were and where they are now, they've realized that you speak to buyers and, oh, so I know I could have got that. And for so long, I think they were caught up on where it was. Now- So there's an acceptance now? There's an acceptance and there's probably, again, the confidence in the market that they can see being such low numbers.
It can't turn that quickly. Confidence breeds confidence, right? And at the same time, one thing that helps with confidence today is obviously a market in that demographic is very sensitive to would be interest rates. Now, there seems to be a perception in the market, whether it's going to prove true or not, time will tell, that the interest rates are probably settling at this amount. That breeds a level of confidence about what people can budget for, how their pre-approvals are looking.
Do you think that your market's a bit sensitive to that? I actually don't. Only because of the, for example, we're a $400,000 villa, which last year was a $300,000 villa. We're renting them for $550,000, $580,000 a week. So if it's, I'll use an example, on an $800,000 property, you're not necessarily getting $1,100,000.
I think that sort of price point of over $600,000, I think the interest rates are probably pinching a bit more because the returns aren't there, but the returns are so strong at that level. In fact, I can't remember the last time I had a buyer try to use that as a negotiating tool. Oh, interest rates and because it just doesn't. So, you're saying the rental yield is supporting the serviceability of the investor. It's exactly right. Yeah.
It probably is a sweet spot, that price point. I think what, well, interesting, 12 months ago, it was sub 450 it worked. It's now very high 5600. It starts to not work as well, but we might be sitting in six months and saying, oh, that's changed. Yeah, the rent's now 650 a week. Yeah. A couple of examples, we've just leased a three-by-one, which went for 510 for $580 a week. We've had a three-by-one, which was really well presented, really neat and tidy in the early 600s.
Six months ago, that was sort of groundbreaking at 525. What about three, four years ago? 320, maybe. And if they were behind on rent for six weeks, you'd probably work with them. But it is really competitive in the rental space. And we have, when people talk about behaviour of tenants, the reality is they're on their best behaviour now because it's so competitive that if you basically don't look after the property- You're homeless.
You can be homeless. And when you're going up against 20 other applicants, if you haven't had great rental history, it's going to be pretty tough. Two years ago, you gave us a tip that the best performing product is going to be that five to 10-year-old villa, villa, three by two, that is in the 200s, late 200 thousands at the time. Yeah. How's it performed?
Exactly what we thought it would. And the reality is most of the costs we're hearing about a villa, a turnkey villa being constructed, right around the 300,000. Yep. So to buy something that's still a three by two, still within the same zoning, so the same size of a lot to a degree, and you can paint it if you need it, maybe update a bench top, update a kitchen.
They're going for sort of 420 now. so it's um i've just seen one that we spot on shane well done well it's not it was obvious though wasn't so obvious because the yield was there the new product isn't there so when i look at areas that are probably and if you speak to top agents like lc corby for so long in bell divas she wasn't her clients weren't competing with the established it was the house and land package the new one coming up now bell divas has been going gangbusters because
that's off the the table. In Gosnells, there isn't a huge amount of new large homes. And whilst if there was a new large home on a full block, it'd probably go for 750, 800,000, which we've just transacted. People would pay that. People would pay that. But the villa space, because the developers haven't been willing to push the button understandably, that new product hasn't come to market.
So that secondhand villa, which is still relatively modern, obviously the reason they have the zoning is it's close to it's walking distance to most amenities. They've skyrocketed. And I can't see them slowing down at all. So you're saying that you're driving the streets in Gosnells and you're not seeing anything under construction still? There's a couple. There's a couple, but when I look at...
When I look at what they would want to achieve in the current market, and I think they would achieve for three by twos completed, depending what they paid for the land, because a lot of these people bought this land back pre-2014 and they've done nothing with it. Burning cash. Burning cash sitting there. They would probably go close to 500, a brand new product. Well, that triplex would have cost them high 500,000s to finish. Now it's 900s.
Those larger blocks are a really good barometer for the market and I guess the confidence in in the market. So if I look at 2014, which was 2007, they got up to about 450 for those 1300 square meter lots, five unit sites. 2014, they went right up to 550. 2016, they were selling at 320. We've just transacted on two of those, which have gone for 630 and 637,000. So how are they doing their numbers on that? That's not stacking up. But it's not stacking up if you aren't anticipating growth.
So the yield isn't as high as what we've just spoken about. But interestingly enough, we'd always sell previously when people were ready to develop a cleared site with DA for more, obviously than one with a house on it. It's the other way around now. People want the return. They want the return because they know it's not ready to develop today.
Day, but that confidence level of, I guess, to a degree, land banking, taking a punt, they're still getting $550,000, $600,000 a week on a basic 1970s home if it's got room to park maybe a couple of work utes or a couple of vans and that sort of thing. Well, that's the reality. They're going to have to factor in holding costs there, and they'd like to think that there'd be some level of yield that would be close to covering the interest portion of the loan.
Yeah. And as you know, with interest, the way they are at the moment on investment properties, they're probably around 8%, but they're not banking on the yield, they're banking on growth. And that's been a while since that's been the case on those sites. Well, it's a bold strategy, Cotton, because there's many other places you could go to that are higher demographic than Gosnell's, for example, where you could just buy a family home and bank on growth.
It's an interesting strategy, in my opinion, to buy an investment property with development potential, with the strategy being to develop at some point in time and just hope that the units, the four or five triplex, The four or five units that you're about to develop go up by 10% over that time period. But look at scale that they're looking for at the end of the day. 100%. I do believe if I look at that new product coming through there, three by two, 230 square meters, I'd be surprised.
If you were starting them today, I'd be, in fact, I'd almost bank on it. They'd have a five in front of it by the time they're completed. Now, you're a man who loves anecdotes. I love hearing them. Can you give us a couple of crazy stories that you've seen transacting in the last couple of years in and out? Certainly can. I mean, I use that example. we spoke about a property, which was a corner lot, 680 square meters. We spoke about on the back of that, I got a few calls from people saying,
where can you get a subdividable retain and build home? Because I don't believe it at 320,000. We've just transacted on one, which was basically held just over the capital gains period to a degree. And that's gone for just over 500. Had another one, which basically they paid 345,000.
They've had over 16 months. months and it wasn't like it walked off the shelf it was a four by two very small four by two but i guess buyers from over east funnily enough took the punt still haven't seen the property never been wwa we were just transacted on that yesterday at 575 yeah so well above probably double the median growth that we've seen there we spoke about 35 growth in the last two years some of these good buying properties and good selling properties we're
talking about 70 here here yeah and again it's not like that was a snip at the time that wasn't like a sold-off market it was on the market everyone had opportunity and we were not convincing buyers we're going guys please step back and look at this this is a no-brainer but i guess people that took a chance have been rewarded so when we think about how markets aren't homogenous they they go up and down in they're never growing at the same
time and when you're in a sub market sub markets rarely rarely grow all at the same time because they're substitutable products. As you said before, Langford, Gosnells, right? The only exception that we've seen, for example, is last year, every suburb in the city of Armidale seemed to have gone up 30% at the same time. That seems to be more of a correction on replacement value.
But in your area, that city of Gosnells space where there is the Thornley, the Gosnells, the Maddington, the Langford, where do you think the opportunity lies in that city, in that local government area that really isn't seeing the love it should. Is it still Langford you're talking about? I think Langford's undervalued when I look at what's happened even to Ferndale, Linwood. I guess ultimately, typically, the further you get closer to the city, typically prices get higher.
Well, they should be. They should have more downside support. Yeah. Probably what I think is the thing to note, a lot of the people we speak to and people in Gosnell's tried to develop years ago, apartments. You've also got to look at what the demographic for that area want. Now, two by ones with one car bay, it might look impressive on a spreadsheet, but is it going to sell and is there going to be a demand? How many people in Gosnells only have one car for the family? It's pretty rare.
It's rare, right? Because they need the car, especially now with the train line currently being constructed. So I think if you look at what your potential demographic is, and I'd say realistically, it's investors which bring young families. So whether they're a tenant or they're an owner, a lot of young families. It's an older demographic through the air. A lot of people don't realize that, but it is changing.
If you look at, let's work down the train line, look at the areas where you can still You'll get good-sized blocks with good solid homes where you're not living next to 20 townhouses or apartments. And realistically, it's happened through Belmont, Cannington, probably overdeveloped to a degree, I think. Cannington's quite high density for the location. Yeah. I think it's undervalued, Cannington, but that's another story. Then we get through to Beckingham. Cannington was in my top 10.
Yeah. Well, there you go. I think Beckingham probably went a bit heavy on high density. Great area. Look at the locale of that. I think that's undervalued. Thornley pockets of Thornley through that spring road on that train line Thornley's performed really well because it hasn't gone too high density, Then it become a bit more unaffordable. So six minutes away, Gosnell's hasn't become that high density.
Now the zoning may be there, but a lot of the developers are starting to realize just because I can put 20 units on it, doesn't mean it's the right choice. Just because you could, doesn't mean you should. And that's why I'm speaking to agents, whether it be me or speaking to an agent near and saying, what's the easiest product to sell? What's the shortage of? I think supply and demand always comes into it. And who would buy it tomorrow? If it was ready tomorrow, who would buy it?
And if you say, well, I don't know who would buy that, well, why would you build it? So, I do think that's something to note, that your target demographic and the investors, I think they're cluing onto that too. Renovations. We've spoken the last few weeks about the opportunity of renovation at the moment, given the reality of that replacement cost issue. Have you seen people come in and out of Gosnells and do a quick sub-12-month renovation? renovation?
I've got probably 30 property flippers on our database. I've got several that do almost one a month and they do well. They know their product, they know it. The buy is where they make their money. The sale with a good agent who knows what they're doing, you'll get a great result. But the buying, probably what's hardest for them is no one wanted to do it before.
Now it's the trend. Now it's the trend and there's more competition. And to be honest, Sometimes we're seeing new property flippers come to the market that probably are paying more than they should for their profit line because they're inexperienced. They don't realize what they think the things aren't going to cost as much. They're buying a project. That's right. But the insurance for them is- If worst case, they're still probably going to have a positively geared property.
And at the same time, and this is what I've said before, renovations for me only work in the time of the cycle where the market is showing its own passive growth. You're insulated on bad decisions, on risks that come within renovation structurally. And so, half of a renovator's profit that they'll present to me, I'll look at it and say, well, to be honest, half of that's actually just passive growth in the market. You may have made a bit of money out of that renovation, but the most of that
profit you made was just when you bought. Yeah.
And again some of our best property flippers even in the worst market have done really well but i would say they've been pretty diligent they've stuck to what they know it's going to cost and some of them even have the same materials they're literally this tire works this cabinetry works this setting works so it's experienced they're systemized they're systemized no emotional attachment you know that's one thing we see the worse the property looks and
presents the bigger of the opportunity because the pool of buyers are willing to take that chance and also get the finance. As you know, to fund these things, you've got to have extra money because the LVRs and et cetera, the banks might be a bit tighter on the risk side of things. So, that's something also to note. Canningfell is an adjacent suburb just down the road. It's the shining light, I guess, communally in that whole area.
When you make it in Gosnells, you move to Canningfell. That's right. It is obviously the aspirational suburb of the area. Half of it is in the city City of Gosnells as well and Canning for everyone's knowledge. Do you see a lot of people getting to that price point now in Canning Vale where we're getting close to a million bucks in some spaces where they're cashing out downsizing back to Gosnells or is it a point of no return in the social structure?
I haven't seen it, but probably years ago that might have been the case. I remember actually that really happening. But with the growth of PR orders in Harrisdale and surrounding- So they're going that way. They're probably going that way because people typically, Typically, if they want to downsize, they don't want to downgrade. And obviously, the newer supplier product coming through there. Not to say that you won't get great buyers there.
We've had some people that aren't so caught up on going from Canning Vale back to Gosnell's find a buy on Astley Street, overlooking a river reserve for $320,000, and they've cashed out at a million marks. But typically, that's not the norm. Yeah, they're heading west. Yeah. Yeah. And I guess it is all shiny and new through there. There's new shops and everything. New parks. Yeah. So Southern River's gone extremely well for quite some time.
Again, that was really hard to sell because you're, again, competing with all that new product. Very cookie cutter. Yeah, very much so. But as that sort of starts to connect to Gosnell's, funnily enough. There's a pocket of Gosnell's, which used to be Southern River Estate. They're going sort of $700,000, $800,000 for a good quality home can go for that money. Even just an average 4x2 in that particular pocket will be well in the $600,000
now. Yeah, and look, there's not a lot of supply coming on either. Most of the properties in Southern River that were going to be developed are being developed right now. And everything from there is going to need a new structure plan with regards to actually identifying issues around the wetlands, the southern river portion there.
So, I think we're really starting to cap out the available land in that City of Gosnells area, which just puts more pressure on the established property in Gosnells, where the township is, where the train line is. And to talk about the train line quickly, have you seen the construction work happening along the line? Obviously, the line's currently not up right now. Is it having an impact, positive or negative?
It's having a positive because there's actually two major railway crossings in Gosnells and the traffic flows much better. At the moment, it does. So it's actually getting some really positive because you do get caught on those too. It can take some time. So I have had no negative. I've had no one mention it being a real negative because it's not that far. Leaving a bus to the city or carousel and all those sorts of things,
it's really easy to get around given you've got Tonkin Highway, Rowe Highway. way. It's not like sort of Ellenbrook where you've really got that one way in, which can be a bit tougher. Getting around in Gosnells is pretty easy. Now, let's pull the scope out a little bit. You're a leader in West Australian property in general, not just in Gosnells. I'd love to hear your commentary on where you think the market's going yourself as a guy who sells over 150 properties a year.
What's your perspective on life in 2024 in the Perth property market? I think the acceptance of this market isn't going to change overnight. I still felt that. The amount of people I've said to them, look, I'm going to sell Shane, sit back and wait for it to drop. I was like, guys, whether I sell for you now or in 12 months' time, I'd advise you not to be out of the market because I believe it's going to be pretty hard to catch. So expose yourself to the market?
I think, yeah. We've had to negotiate a lot of interesting terms, longer settlements, these sorts of things to get people over the line so they can move freely to the next move. So I think when that stock level starts to rise, I still see the growth there because Because at the moment, the only thing holding it back from, I think, probably getting up to 1,200, 1,300 sales is just that next step, where to go. We've been sitting around 950 transactions for quite a while now.
Which is record numbers. We're not knowing any time in history before this have we ever been close to that. Record numbers at the lowest amount of stock. Yeah. And when people talk about Perth as far as, I guess, amount of numbers, what I do say when I started in 2006, average days got down to 14. There was only 3,800 properties on the market. Perth wasn't how it is now. It was half the population. No Elkimos. No, Beldivis was farming.
Byford was farming. Elkimos, these areas just didn't even exist. Ellenbrook was an estate. Yeah. So, it's pretty gnarly when you think that that amount of transactions would be taking place with such a low amount of stock. Yeah. So, I think even that 12,000 that they used to say was a balanced market is probably not right when you think about it. That's been quoted since 2007. Yeah, we've been talking about 12,000 to 13,000 as a balanced market. Since the market was half the size.
Yeah. So we're that much further. So we really have double the pressure than the last time we had the most amount of pressure in this market before. And it takes a long time to replace that. I was talking about this a couple of days ago with a friend and what is the pathway to a balanced market or a market that is weaker than the one we have right now. The only way we get to a balanced market, let's say it is just nominally 13,000 properties on the market.
So, 9,000 more properties than we have right now. Yeah. So, essentially three times the amount of properties we have on the market right now. So, how do we get there? Well, to do that, the amount of demand has to drop right off, has to come back to maybe 500 properties a week, which is the lowest we ever saw in 2019 sort of time. I don't see that happening given population growth. All right.
So, that's not going to happen. So, let's suggest that transaction numbers sit at 900 for the foreseeable future. Therefore, the only way that we have- Therefore, the only way we see the supplier numbers pop up to, let's say, 13,000 properties, let's say it's 10,000 more than we've got right now, is we need to be putting on the market more than 900 properties. Let's say we're bringing to market 1,200 properties a week. That's 300 properties a week, right? right?
That's still going to take a significant amount of time to get that market back up. And it's just not even a reality. The market doesn't have that capacity to bring that amount of properties on the market in the first place. No, not with how quickly they're getting chewed up. But even if you look at, say, 950 transactions a week, even if we doubled the market tomorrow, average days- Well, you just bring it back to a year ago. Yeah.
18. If we blow it on top of that and average days goes out to 30, there'd be people killing five years ago average days was 89 yeah I was you know blowing my own trumpet so my average days was 39 yeah so it's not that bad even if it did happen but I it's going to be quite some time before that does come along I think it's very important to build that context into the conversation. Because it's easier to say in a very non-direct or non-specific way that the market's really hot right now.
But it's very hard to actually explain the context to the punter on the street how hot it is. You really have to strip it back about those population differences with the last time that we saw this amount of property on the market. But also what it would actually take, as I just referenced before, to bring it back to a market that was balanced. And at a balanced market, we're still not seeing prices drop. We're just seeing prices stagnate.
Now, that obviously is different across the board, and people will be interested to know that there's over 200 suburbs in the market. Last year, we actually saw 11 suburbs drop in value. That's a reality at every point in time. When the market is dropping, we'll see more than a dozen properties increasing in value. So, it's not a homogenous market. A lot of the suburbs around that Subiaco, West Leederville, Maylands area actually
struggled last year when it comes to numbers. And that goes back to the theme that we've spoken about for a couple of years now, and that the real pressure is around the affordable market. Yeah, 100%. And I also say to people when I look at those areas that might be moving as quickly, you've also got to understand on the back of COVID, a lot of people are having bumpy years, whether it be through grants or increased income.
If you, a $2 million buyer then with interest rates at 1.9% is probably now a 1.2 buyer. That's right. Right. So, it's intense there, but not everyone can afford that level. So, unfortunately, that demand is still there. It's tapered. It's tapered, yeah. Yeah. And we've really seen that, that wing, I think, between the city and-
trig around there. That's where a lot of that aspirational buyer has been, where they really stretched themselves quite intelligently, astutely at the time when interest rates were at 2%, recognising it's the only time they're ever probably going to be able to buy into these suburbs. Because once you're in, you're in. As long as you pay that mortgage, no one's taking that property away from you.
And then to get to a point where those people who probably didn't jump on when they should have, those guys trying to get in now, it's just not happening for them. So, they're either having to double up with a friend or wait for that promotion. Those are the The only way is that those guys who didn't buy in three, four years ago will be able to do the same thing now. Correct.
Not the same issue, though, in the city of Gosnells. No, because there's, I guess, there's no mooring line stopping them from injecting to the market tomorrow because the affordability is there. It was always there. Rents and returns there. Even if it's dropped. Yeah. And you're right. Rents have doubled, really, in the last four years. Yeah. So, for the investor, that has insulated the impact the interest rates have had on the market as well. Yep.
Correct. So you had to put a number to it this year. The median house price right now, $430,000. If we're looking back in a couple of years' time, where's it going to be? Well, the problem is I think the numbers being spruced as far as the median aren't correct. Of course, but they weren't correct two years ago either. Yeah, that's right. I would say we would see around a 15% growth I'd expect over the next 12 months, a genuine 15%. It won't be as intense.
Well, I keep saying that and it ends up being the case. But I look at a property today before we put it on and I'm saying, well, you always want to push prices for owner without losing engagement from the market. If everything tomorrow in that area with the demand, every owner said collectively, guys, as a union, we're putting 25,000 on everything. Would it sell? Yep. Collectively, if we put 35,000, would it sell? Yep.
So when I start to look at that and if we got up to 50, I'd still see the market buying it. It's hard to not not see measurable growth. Well, there's your 15%. Yeah. And that's how I sort of step back and look at it. Shane Beaumont, thank you very much for coming in again, mate. I'm sure we'll have you in again soon. No problem. Thank you for listening to another episode of the Perth Property Show.
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