They’re cheap and ugly. But these Perth houses are flying off the shelf

Prospective homeowners hoping to crack into Perth’s red-hot housing market are snapping up even the most dilapidated properties in a bid to get their foot in the door.

A dishevelled 1970s Armadale home on a 700-square-metre block on Braemore Street sold for $10,800 in 1993. It was listed for sale last month for $289,000 and attracted 30 offers before settling at $360,000.

This rundown home in Armadale which is in serious need of renovation is already under offer.Credit: Domain

Mark Grogan, from O’Neil Real Estate, said the rundown three-bedroom, one-bathroom brick home with an asbestos roof was in serious need of gutting but, once renovated, could fetch up to $570 a week in rent or sell for about $550,000.

“It’s not a pretty house, nothing works, and it doesn’t have a kitchen or a toilet,” he said.

“Someone thought about doing a renovation but then decided to not. Someone thought about not cleaning it and stuck hard to that idea.

“It needs a full renovation, but on a block this big it’s worth making it happen.”

Strategic Property Group managing director Trent Fleskens said it was a case of “buyer beware” when it came to purchasing a property at the lowest price point.

“When buying at the cheapest end of the market, in older suburbs, there are often increased risks of anti-social behaviour, which may be a reason the area is cheap in the first place,” he said.

“Where one street can be well-maintained, the next can tell a different story.

“It is more imperative in these cheaper suburbs to spend time in the immediate locality outside of home open times to meet neighbours, watch vehicle movement, and check for less desirable households that may affect your lifestyle.”

A property in Girrawheen with a “zombie pool” and garden was under offer before the first home open.

Fleskens said areas such as Westminster, Balga and Girrawheen were relatively close to the city and often on large original blocks with houses ready to renovate.

“Whilst there are in lower socio-economic areas, there is a great community here and prices are well below their neighbours in Balcatta, Hamersley, and Warwick,” he said.

“In the south, similar suburbs would be those such as Parkwood, Langford, Ferndale, Redcliffe, and Lynwood.”

Fleskens said suburbs in the cities of Kwinana and Armadale represented the lowest price points in WA because they offered less amenity.

“Now, with affordability being a major factor impacting purchasing decisions, a new swathe of buyer is moving into the area, along with a large contingent of investors seeking strong rental yields,” he said.

“Buyers should take heed though, these are still generally the weakest markets in Perth and will be the most exposed to downside price pressure in the future.”

Meanwhile, a ramshackle grand old dame on Ninth Avenue in Inglewood is listed for $900,000.

It sits on a 508-square-metre street front corner block just metres to Beaufort Street, and is one of the few left giving buyers the opportunity to start from scratch.

The latest Westpac Home Ownership Report released on Tuesday found 44 per cent of Australians plan to buy a new home in the next five years and to combat affordability challenges, aspiring homeowners were getting creative and becoming more open to compromises to break into the market.

Three quarters (75 per cent) were willing to buy somewhere they weren’t previously considering and half were considering “rent-vesting” to break into the market.

Westpac managing director of mortgages Damien MacRae said while a house was still the preferred property, this has decreased by 5 percentage points since 2021, while apartments and units have jumped up by 7 per cent.

He said buyers were casting their expectations wider and willing to compromise on location.

“During the pandemic we saw more buyers seeking property further from the city in pursuit of more space, however it appears buyers are willing to concede on location in order to get a foot in the door,” he said.

The latest lending data from the ABS, released on Wednesday, reported that the average loan size for a property in WA was at a record $530,000.

According to the latest data from REIWA, many suburbs that saw the most house sale price growth in February were in affordable pockets on the urban fringe including Two Rocks (up 2.9 per cent to a median of $515,000), Armadale (up 2.6 per cent to $400,000) and Greenfields (up 2.3 per cent to $452,000).

REIWA has 121 properties listed for sale in Perth for $400,000 or less.

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