Off Market Ep1 | What's really going on in the Karratha market?

In this episode Jordan and Ben recap on the year 2026 so far. Jordan and Ben review the trends we've seen throughout different parts of the year and the turning point that has led to some softening in the market of recent. 

Jordan and Ben also discuss the upcoming spring selling season and what they expect will happen for the remainder of the year. 

Transcript

SPEAKER_00 0:00

Hey everyone, and welcome to our first episode of Off Market. I'm here with Ben McGuigan. My name's Jordan and uh we are part of the sales team here at RealMark Cratha. Uh we're a very active in the real residential real estate space here. And uh for those that are listening probably and have an interest in the Kratha property market, you've probably come across us before uh and you potentially have seen our Kratha Market updates. And we thought recently there's been a lot of things going on, and we have a lot of conversations with lots of buyers and sellers and just people about the property market, and we thought, what's a better way we can get information out that's that's real, that um is of value to people that are making informed decisions um because there's a lot of noise out there, and I think definitely sometimes there's a different perception. You talk to people and they have a different perception, and you think, well, no, actually, this is kind of what we're seeing. And given the volume we do in Cratha, I think we have the ability to talk about it and share some really good information. So that's why we're doing it. Um let's start with what's happened this year. Um, I think it's instead of talking about so much what's happening right now, let's let's talk about why, how we got here and where we're at now. So I think it's good to start with uh Boxing Day last year, because we listed 14 properties for sale uh on Boxing Day, which is a strategic move that we do every yeah. Um, and I think seven of those properties were sold around the second or third week of January. So there were still leftover buyers from uh that December period through to January that we're still looking to transact. Obviously, during that period, there's a lot less stock because our competitors and things like that are generally not listing a lot. Um, a few did, but not but not much, typically. Absolutely. We were still seeing buyer engagement and auction results be quite strong with uh like the number of buyers walking through doors and bidders at auctions or online auctions. It was really strong.

SPEAKER_01 1:54

Yeah, for sure.

SPEAKER_00 1:55

Um then we got to this weird place. Uh March was still quite good. February, March, it was just kind of the same. I would use the words um, it felt like we were surging a little bit.

SPEAKER_01 2:05

Definitely was up. Yeah.

SPEAKER_00 2:07

Yeah.

SPEAKER_01 2:08

Well, how do you describe surging? Do you think? Oh man, I think that market was really strong. Like, I mean, for the first three months, it was just the buyers were active. You know, we had way more um attendees during home opens. So I think there was just a bit more interest in in all the properties. Obviously, with that lower stock on market, it was just buyers were hot and ready, ready to buy. So yeah, then we went to, you know, we had a few things going on interest rates, the war. Uh what else do we have?

SPEAKER_00 2:37

Well, I think, yeah, just going back to what you're saying there, I think the the word I'd use around that January to March period, that first quarter of the year was high confidence levels in the property market and just generally the economy. Um and so with that, like buyers move quicker, there's they're more decisive. Um, there's just a general feeling around that um, you know, now that now's a good time to do it. Borrowing capacity was up. Borrowing capacity was up as well. That's that's another part that plays a role. Uh, then then, like you say, we hit that April period. Now, typically in April, we we always see things get a little bit tricky because you have Easter school holidays, which typically in our marketplace, um, everyone goes on holidays. Yeah. Like it's it's like it's almost like a ghost town. Yeah, it's just this weird two or three week zone where people are away on school holidays. So the first big break for the year, people are generally getting a little bit fatigued from the start of the year. Um, and they go on holidays. So that's very normal. So we always try to manage our listings around that anyway, typically. And and then we had Anzac Day as well. So like April, you have the I think there was like three long weekends in April this year. So that was always going to be tricky. Um, but then we had interest rates go up, we had the war start in the Middle East as well, and then we had the the chatter around government changes to policy. Yeah. So we'll get into that a little bit uh a bit later on. But that created a little bit of softening and and less confidence in the market in general. And what I would describe it as is people had like a wait and see mentality. You see that come in and you lose a section of your buyers that are that were maybe looking, they stop coming to open homes or they're like, oh, we'll just we'll just wait and see. And so when you know, if there's 50 buyers in the market, it's probably more than that, but let's let's just use round numbers. If there's 50 buyers in the market and half of them decide that that's now their mentality, that's when you see the softening. But then there's still so there was still a lot of stock coming on. Yeah. So off the back of April from Manzac Day onwards, we tracked it if you remember. We saw we saw 42 listings hit the market in the space of three weeks. Yeah, it was a lot, yeah. And then that buyer drops off as well. Yeah, there's more properties left buyers. Created this bigger gap. Yeah. That's um we felt it very quickly, the gap between buyer and seller and the and the lack of urgency around that period for buyers to actually move. And then, you know, you see the uptick in stock and the dropping of buyer engagement created a really interesting period that I don't think we'd felt in the Kratha market for for quite quite some time.

SPEAKER_01 5:06

Definitely softened up, didn't it?

SPEAKER_00 5:07

Yeah, softened up big time. I reckon we lost about five percent overnight. Yeah, yeah. We won't show in the data because when they do the quarterly tracking, that's sort of yeah, but we could feel it because we had a lot, we we had some listings, so we knew that. Yeah, yeah, we had a lot of listings, yeah. I think we had 28 on. Yeah. So like it was a lot. And that was at all price points, so we can we can feel which is interesting because there were some price points and styles of property that still perform really well, which which we'll talk about. Um, but there was definitely a change, yeah, and it was um noticeable. Then we moved, yeah. So listing numbers went up. So off the back of that three weeks of Anzac Dalek, so we had 42 listings. Then the three weeks following that, if you remember, we tracked it again, there was like another 25 or so listings. So it was something like close to 70 properties hit the market in the space of six weeks, seven weeks, which is a lot of stock for a town that only has you know seven and a half thousand dwellings or thereabouts, you know, it might be a bit more now, but it's sort of around that number. So that's a lot of stock, and there wasn't more buyers suddenly being added to the pool of buyers. That was that was my experience. In June, the start of June, we started to see things start to level out. Certainly wasn't on the uptick, but it was didn't feel like it was like falling, if that makes sense. Yeah, yeah. There's a software. Just holding a little bit, just holding, yeah. Not everything was performing super well. There was started to see some properties start to transact really well, um, but it wasn't going up. Yeah. Um now today we we feel as though things are getting better, you know, generally. Still feel like there's a price point and a um style of property that isn't necessarily going to perform as well. So what I mean, what I mean by that is like we're not getting five offers on it. We might have one one opportunity to sell over the course of a two or three week period. Um, and maybe you're not getting 10 or 15 buyers three, you might be getting four for some properties. Yeah, then when I say they're performing well, to me that means we're getting 15 to 18 inspections. There's three or four bidders or three or four offers, and it's exceeding you know what what we thought it would go for. That to me is what performing performing well means. Absolutely, yeah, yeah.

SPEAKER_01 7:21

And key properties do that, correct.

SPEAKER_00 7:23

Let's just talk about the government changes because that's a big, big topic at the moment. Um, I'm not gonna go into what they are and stuff. You can Google that, and there's plenty of information online around that. But changes to the capital gains tax. Um I think we noticed very quickly um that there was a lot more people that were now thinking about selling in the next 12 months between now and July 2027. So I think that'll continue. I think there'll be lots of people, depending on when their leases end on their investment properties and their strategy and how we strategize that, there'll be uh at different times of the year a few more listings that come to market. Don't think it's going to change much around people buying, though, at the moment. I haven't seen any change, it affect anything. Well, we put it no buyer dialogue is around like I'm not buying because of changes capital gains tax, but definitely no, yeah, and the types of sellers is uh 55 plus maybe have a few properties, not just in Kratha, but in other areas um closer to retirement than not. Yeah, definitely. And they're like, is the risk of holding an investment property in a place like Kratha that does have a tendency to go high risk? Yeah. Um, you know, is it worth holding on, or should I just tap out soon and and move on?

SPEAKER_01 8:36

Well, metaphorically, while the market's up, yeah, you know, uh they've seen the uptick in six years into where it could be. That's right. So they're like, well, yeah, that's you know, exactly.

SPEAKER_00 8:44

So that's that's who I think it affects. Um, I think people who own property, you know, I I haven't had a lot of people like in their 30 to 40 sort of calling and saying, Oh, capital gain is gonna affect me. They're just like, I'll just I'll just write it out, you know, they're fine. Um, changes in negative gearing, again, not a I don't think is a huge impact on our market in the short term. We're positively geared, so it's not really gonna impact you're not buying a property in Cratert to negatively gear it. Um, everyone, every investor buying here is looking for cash flow or capital growth. Um, just on that one, I think that the the the thing to look at in 12 months' time is going to be how many development application approvals have there been for new builds? That's right.

SPEAKER_01 9:22

Yeah.

SPEAKER_00 9:23

That's not Woodside and it isn't a major mining company. Like, how many private investors are going to go into a house and land package and rent it out? Now we know there's a land estate coming in at some point. Mala Targa will get lifted off. That's that's the talk. I think at the moment, all the investors we're talking to aren't asking us, have you only land to build? I've spoken to one one one gentleman this weekend that said, have you got the last two months? Yeah, yeah. But nothing, there hasn't been an uptick all of a sudden. So I still feel like there isn't going to be a huge amount of supply added to the private market because of that. Um, then the other one was the which was sort of a surprise to a few people was the change to self-managed superfund residential lending. Um which happened quick. Happened very quickly. Um, and what did we notice straight off the bat when that got on?

SPEAKER_01 10:06

Yeah, as soon as as soon as that happened, people who didn't have that uh cash position in their self-managed, they needed to buy immediately. Yeah. So we saw a bit of an uptick in in ticks on that way. People squeezing it through. Yeah, yeah. Which it was about what, five percent nationally, five to five percent nationally. So now it's like really, you know, they've come in hard at the moment, trying to get something before those changes come into effect on 10th of August. Yeah. So bit of a slight uptick there, but obviously that'll drop off after.

SPEAKER_00 10:31

Yeah, but it is the thing that people need to realise is it's only sort of you know five-ish percent of lending in Australia. So um they're still gonna be there. That yeah, it's just gonna look different. Um, and the money will just flow to a different sort of asset class or exactly something different, but you're not gonna lose a hundred buyers in Cratha over it. No, it's only a small percentage of buyers, so I think that's fine. So, yeah, not a huge impact there, but just an interesting one that they they went and did that. But it would just be interesting to see whether how people restrategize, you know, generally at a um national level, like where does the money go? Because you can still obviously borrow um in commercial for self-money super fun. Um, and I know maybe there'll be something that comes around development or something like that down the track. So we'll see. Um, let's chat about the next two to three months because we're in July now, we're coming close to the end of July. Happen quick, happen very quick. Um, and we have this July school holidays ending like now.

SPEAKER_01 11:33

Now, now yeah, they're back at school today. We should know that. Yeah, we should know that. Yeah, I drove through the school zone today, so yeah.

SPEAKER_00 11:39

Uh my kids are in school, so I should know that. Yeah, yeah. Um, so typically based on the previous years and the last four or five years, I'm talking about, is it picks up from here from a buyer engagement point of view. Yeah. Um, and people are back from whatever school holidays they've had. And to be honest, a lot of people start to set their sights on Christmas. Like you start talking about it fast. You start talking about it.

SPEAKER_01 12:02

Yeah.

SPEAKER_00 12:03

Because it feels like time goes faster and faster every year, but people do start talking about what they're going to be, where they're going to be at come Christmas time. That's it. So a few things that I think happens at this time of year through to November is if you look at who comes through the open for inspections and who's making inquiry on property outside of investors. I'm talking about people that want to live in Kratha. Is it's often maybe the husband or the wife is doing FIFO.

unknown 12:27

Yeah.

SPEAKER_01 12:28

Now they're ready to settle down.

SPEAKER_00 12:29

And their home is Perth or wherever, and they've had enough of it. And it's like, let's just move to Kratha and go local. Yep. And you typically find that they're trying to transact before Christmas because they want to they want to time the kids' move out of school and things like that around school holidays. Yeah. So that's why, from a behavioral point of view, you do see that uptick in those types of buyers. Also, what happens is there's like a bunch of leases, residential leases that where people are renting, where those leases are coming to an end sometime over the next six months. And that sort of forces them to make a decision on whether they're going to enter the market and purchase their own property because rents are high. And that hasn't changed through all of this, all everything that we talked about this year. The rents have still gone up. Yeah. No other way to look at it. So they're like two people, two types of buyers that are very um sort somewhat emotionally driven. I I I think, you know, because they want to tick that box off.

SPEAKER_01 13:27

You want to bring your kids up here. Correct. We're gonna buy a house.

SPEAKER_00 13:29

Yeah, yeah. Well, yeah, they start seeing the rent price and go, it's it's cheaper to buy a house. That's right. That's the old saying. Um, so that's that's the reason you feel like, or we feel like there's always just like a different energy around the marketplace through this period. You do see that um stock levels do come up a little bit or just are very consistent, but generally met with a high level of increased buyer demand because you get investors because the returns are very good. Um uh and then there's those buyers that we talked about. Uh we have an interest rate decision to come in September. Yeah. If it goes up, yep.

SPEAKER_01 14:08

What do you think happens? Oh, I was gonna ask you the same thing. I mean, like, look, if it goes up a bit, I don't think it's gonna be the end of the world. Like in regards to buyers, I still think that they're gonna be transacting. Um stays the same. Yeah, it's probably gonna stay the same a little bit. I think because at the moment, obviously the change with negative gearing and Karatha's a very positively geared place. I still think like it's just gonna affect the upper end of the market just a little bit with regards to owner occupiers. You know, that's what I'm seeing. But what do you think?

SPEAKER_00 14:37

And so when you say upper market, do you mean million plus?

SPEAKER_01 14:39

Yeah, million plus. Yeah, mil to one one. Obviously, that borrowing capacity is gonna go down a little bit. Um, and it's a bit of a harder place to to lend up here as well, if you don't have a good broker. So um, yeah, I think it'll probably just affect them a little bit. But uh yeah, what do you think is gonna happen?

SPEAKER_00 14:54

Uh I think um if it goes up. If it goes up, I think there'll be a few buyers that it look, I think a lot of it depends on the media narrative. Yeah. That like that to me is almost everything because people listen to it, yeah, and then um develop their own story around what the market's doing, right? So um, so for me, I think if it goes up, potentially you see a little bit of softening, but it'll also be September when the market's generally pretty hot. That's true. So I sort of feel like it won't have too much impact. If it holds, then I think it's it's gonna be you know good for property owners because I think um people get confidence and then you'll see that September, October, November, typically a lot of sales done during that period. Um, you know, I think that'll that'll really kick on. So that's one to watch if you're a property owner and you think about selling. Like if you're trying to time the market, time the market, you know, and like hit the optimal time of year, like I'd be looking at those dates. Yeah. And doing it, do it soon. And either making a decision on do you go before the interest rate decision or do you go, do you go after? And and and sort of make a decision around, do you think if it holds, is it gonna Then what if it goes down? I I don't think that'll happen. Yeah, many can't see it happening right now, yeah. Yeah, not with uh inflation rates. So um the only dates to look so we always we look at dates a lot, you know, when we're planning with our clients. So dates are really, really important to us. Um, so we have in our calendars marked certain dates that we need to be aware of.

SPEAKER_01 16:22

September school holidays.

SPEAKER_00 16:23

Yeah, September school holidays, but phenackle's coming up, you know, in August. That's like a date where it's a long weekend here in Kratha, not everywhere else in the world or in Australia, but um, it is here in Kratha. So, you know, home homeover numbers generally drop off, people go away. Not everyone goes to PhenAckle, like people actually go away and take that opportunity to go away. So you just gotta be aware of that. So we see that but there's another date which is actually September school days don't typically have a huge impact. In fact, I find that that time of year there's more people staying in Kratha instead of going away. So buying our activity sort of continues, but also you get people coming to town to find a property to move here before Christmas.

SPEAKER_01 17:00

The weather's still good, yeah.

SPEAKER_00 17:01

But there is one date, which is April, uh sorry, September 25th, which is AFL grand final, and then on the Sunday is the NRL grand final. So, and people, you know, you might think, well, what does it matter? It's just a game, but it does because people just don't home opens on every AFL grand final, like last five years, eight years, whatever. Quiet. Always quiet. Yeah. Well people won't. Because it's because it's 12 30 when it's bounced down.

SPEAKER_01 17:26

So what about early open for inspections?

SPEAKER_00 17:29

Yeah, I mean, we'll do them anyway, but it's sort of just the awareness of definitely hey, you probably need to allow for an extra week if you're on market around that time, or you're trying to get sold before that date. Yeah, yeah. Because that is also school holidays, that date.

SPEAKER_01 17:41

Then what's happening now?

SPEAKER_00 17:42

Then now so just weekend gone by, we had um the 10 open for inspections, which is good numbers, um, but we had 30 inspections with a lot of those buyers actually still overlapping.

SPEAKER_01 17:55

Um looking at multiple properties.

SPEAKER_00 17:57

Looking at multiple properties. So, really, when you say 30 inspections, it's probably like 18 buyers, maybe. That was sort of around that number. So, when you break that down, like that to us is always the indicator of how strong the market is, how many inspections we're getting and how many different buyers are out. So I don't I don't look at that and go, oh, that tells me we're on like a surge right now. That's sort of a really balanced number, especially when you look at the supply level. Um, not everything right now is selling super fast, contrary to belief. See a lot of things on Facebook, market's booming. That's it. No, I don't think it is.

SPEAKER_01 18:28

It's certain properties, right? Certain properties like high-end things.

SPEAKER_00 18:30

Yeah, so let's talk about that. What's what do you what do you think?

SPEAKER_01 18:33

I mean, some things are working. What areas are performing well? Oh, definitely, you know, things that are renovated, um, like really family-friendly properties. Let's go areas. Oh, areas, yeah. Bogar's transacting really well. Yeah, um, Baton quite well. Yeah. Um, you know, some areas of nickel doing well, Dampier, especially.

SPEAKER_00 18:51

What areas of nickel? Because Nickel's a funny suburb because you got what I call old nickel, being having lived here for a long time. Yeah, yeah. Old nickel, nickel west, Tambrae Estate. Yeah. I mean everyone forgot about Tambra Estate.

SPEAKER_01 19:00

Yeah, me too. Yeah, uh yeah, Tambra Estate's going all right. Tambra Estate's very good. Um yeah, New Nickel, what do you call it? Nickel West. Nickel West, that's it. Yeah, New Nickel's got a better ring, but that's all right. Yeah, nickel west is going good. Not so much old nickel, although there is certain properties there that we've seen a fair bit of uptick on on buyer inquiry. Um, it's but mainly based on you know, type of property, three by two, something with the second bathroom. Yeah, second bathroom is a good one.

SPEAKER_00 19:26

Yeah, doing well, but also if it needs renovation, so across the board, doesn't it doesn't matter where it is. Um, because Dampy is another area that's still performing, in my opinion, quite well. Yeah. Um, however, the caveat on all of this is it I'm finding that anything that needs a significant amount of work, it's it's not performing well. Like it is harder to sell. And the reason for that is um even if you're a tradesperson, you know what you're doing, which I definitely don't in terms of renovation. X-barking. You get here and is that still a trade? Yeah, controversial. That's yeah. Um is if you're even if you have the skill, like it's time, if you've got a family and you're renovating, like that's a that's a that's a that's a process in itself. Um and then if you don't have the skill and you're getting trades, like getting trades in this marketplace is difficult. You know, it takes a long time, um, and it costs a lot. So even if I look at Dampier, which I sell a lot in, it probably needs renovation could be say 650, 700k right now. But generally speaking, we'll need around 250 to 350. Exactly. You know, just to spend it. And then you can go and buy one already done at 950, already done, or maybe needs one or two things. Yeah, maybe it needs a pool or maybe you just do a shed or something or something. But it for the most part it's done. So that's why those renovated shouldn't delight properties, like they they do perform a little bit differently.

SPEAKER_01 20:52

Yeah, people want to move in and just set and forget.

SPEAKER_00 20:54

Set and forget. I think a lot of that's driven by I call it the Uber economy, you know, like you press you want the press button on your phone and the food turns up or the car turns up and you get angry if it's not there within like two minutes. So I think that's starting to translate into property now where people actually just want to buy and move in, enjoy, and not have to do trades.

SPEAKER_01 21:12

As well, when you look at our properties that we have up here, they're typically older style properties. So they're gonna need a little bit of work. Yeah, you know, um, like favorite sale for this month, 48 Hunt. Great property. That's a great example, actually. You know, renovated and great price.

SPEAKER_00 21:27

But even so that performed really well, but even though okay, sold in six days, under contract in six days, three bidders, three registered bidders, um, sold for a lot more than what we sort of thought it would go for. Um, but two people, great property, really wanted it. Yeah. Um, however, almost fully renovated as well.

SPEAKER_01 21:46

Yeah.

SPEAKER_00 21:46

So performed extremely well.

SPEAKER_01 21:48

Well, what did I say? I said I'd probably subsale my house for that one. It's great. And a renovated property, like even for us, like it's it's nice to it's a great sell. Like it's it's good to do.

SPEAKER_00 21:59

So I think um some other properties that so I agree, Dampier performing very well, generally speaking. Um Bainton, yes. Uh there is a huge demand for properties one to one point three. Yeah. There is a massive buying pool for that type of property still. So that's uh, you know, your bigger four by twos in Bayton, Nickel West.

SPEAKER_01 22:21

Um bigger block sizes.

SPEAKER_00 22:23

Well, not just that, it's the features, it's the the size of the home, it's site access, it's those types of things. But the market's really funny because you go one up to 1.2, 1.3 maybe, and then there's nothing 1.4, 1.5, 1.6. It then just jumps to 1.8 to 2.

SPEAKER_01 22:38

It's a different buyer.

SPEAKER_00 22:39

Yeah, yeah. But it's just funny because then that's the cycle of construction that we've had because we weren't building homes every year. We sort of stopped building homes in 2013 in the end of the last probably cycle. There's probably like 10 homes built between 2013 to 2018 or thereabouts, or 2020, even before the government incentives came in. And so that's why you have this huge jump in price. There isn't like this middle ground at 1.5, 1.6. Like, I can't think of anything really. I've only sold one or two probably 1.6. Damp, yeah. Yeah, well, there's one in Baiton, but again, again, it was for years ago, that probably is now worth 1.8, 1.9, probably. So, um, and then there's probably the types of areas or probabies that aren't performing well. So it's definitely the renovated delights. Yeah, finding there's a lot of units on the market as well. Yeah, even with those renovated, like longer days on market, you're gonna get probably one opportunity to sell, and you've got to be ready to jump on that. Um, you're not gonna get 15 buys through the open homes. Yeah, you're probably looking at one to five buyers, maybe with a unit duplexes, strata complexes, yeah. The caveat here, and what's different is apartments still perform well. So I'm talking Polago, the Bainton, they're still selling very well. Great investment pool for them. But yeah, your older 70s built, 80s built units. That's it, bit tired, bit tired, complexes looking a bit tired. Um, well, I won't name any complexes, but many of them. We know them, but um, that they can sort of not get the price that you think they maybe should be getting. Because the strata fees are really high on them as well, typically. Yeah. Cool. Well, hopefully that gives everyone some great information to make some informed decisions. Thanks for joining me on our first episode. Great chat, mate. Appreciate it. We'll chat to you soon. Yeah.