I really think its going to be an interesting time in Perth.
There's other personal factors that may hold me back in purchasing another property, as I need to allocate funding for care assistance for my Father or downsize where they are living. They've got a corner block on their PPOR in which plans are ok for another property... Or they can eventually sell & downsize in the same great suburb.. So lots of choices to plan.
My fear is that there's some foreign cowboys who do the developing stuff that may cause potential price nut dramas over East.. It may cause issues that can be negative.
There's always going to be hot & cool spots in every Capital City, each city has differing things going on really. You can say its all equal & it won't be.
Job opportunities will be a worry for most parents with kids, because its changing so quickly sometimes to do certain career choices just doesn't seem worth it's while. However, I still want them to have the opportunity to do what they will be confident in their career choices.
Meanwhile, the rents are still coming in, regardless...meow.
Jimbo
8 Aug 2014, 11:45 AM
Prices are decided by the houses sold during any given period. What happens during slumps is that more of the properties on the market are distressed sales (because anyone who doesn't need to sell, doesn't sell).
This is how markets suddenly crash. Distressed sellers will drop prices to find buyers and once buyers realise they are in a buyers market, the dynamics change. Instead of rushing in to buy to avoid rises, they hold out for further falls. The RE industry will work overtime to try and convince everybody that it is not a buyers market.
I predict a slump in Perth based on the simple fact that there are a number of over leveraged owners who are losing their jobs or seeing their pay cut. There is also an increasing rental vacancy rate which may force some investors to cut losses or (if they have CG) profit take.
There is also the double whammy of a lot of FIFO workers having negatively geared investment portfolios. These people have increasing job insecurity and rely on their high wages to fill the gap between property income and expenditure. These are the people who are crapping their dacks at the moment.
Im not impacted by the FIFO life, but, I've had past tenants who were..those who did ok were those who had their heads screwed on & bought realistically...
Yes there's going to be some who will fall down & that's when some should look very very carefully to see what potentials to buy...
There's a suburb that I've got an IP, I've had the agent contact me asking if I want to sell to an investor..the house is on a full block which can be redeveloped as a duplex pair...
They're offering huge discounts on the selling fee.... Whoopy doo da.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
Personally, I think the sub 5% fixed rate mortgages on offer will lead to decent price rises, as all though FHBs that sat out 2013 will bite the bullet in Spring 2014, in Sydney, Melbourne and Brisbane at least
In Perth, who knows!
I think a bubble will only form when even the most bullish of people on this forum will scratch their heads and say "I don't know why these prices are rising" - are we at that day yet? I don't think so.
Or am I wrong, are there bulls who are willing to step back from the personal crap that goes on (for once), be a man (or woman), and say that they are concerned about unemployment/Iron Ore price/over-reliance on overseas investors/too many crappy 1bdr apartments?
I think we will see 3-5% growth over spring/summer then side ways for a few years in Perth.
I think we will see 3-5% growth over spring/summer then side ways for a few years in Perth.
Hard to find any reason for Perth property to grow in the spring when it is falling back now?
FHB's in Perth are going for new builds in Baldivis and other similar outlying burbs. They can buy a house for no stamp duty, get the FHO grant and end up with lower weekly outgoings than paying rent. They end up with smaller blocks but most don't want huge backyards that need loads of looking after.
Established property is now levied with stamp duty over $430k for FHB's so there is no incentive for them to buy established.
Migration into the state is falling, we are not sure about our jobs (mining downturn) and there are shit loads of new houses being built (no supply problem). rental vacancies are up, rents are down.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
I think Perth will be down, Sydney and Melbourn up. Most home buyers are investors, they will avoid Perth. Interest rates have gone lower so another 5% rise in Syd & Melb.
Most home buyers are investors, they will avoid Perth.
You'd have to be insane to invest in Perth property at this time. The market is slow so if you were thinking of jumping in, you can hold your cash and wait.
There are plenty of FTB's in Perth at the moment but they are buying new build houses and apartments due to the stamp duty changes and FHO grants.
Established property sales will be to up traders and investors. Like I said, I wouldn't invest in Perth property today because there is too much downside risk. High vacancy rates, reduced immigration etc.
Up traders rely on someone buying their home so without FTB's injecting capital in established property, who will be able to trade up?
I am monitoring a group of suburbs south of the river and I am seeing big price reductions in top end properties and rising vacancy rates for rentals.
The following is from stats I have been keeping for the last six weeks. It is the number of rentals advertised on Realestate.com.au in a suburb I have been following. The numbers are taken weekly on Sunday. The last number is last Sunday.
67 75 84 87 95
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Sydney is going to continue up throughout spring. Clearance rate over 80% again today foretells another 3-4 months of increasing prices in the stats as these sales settle. This release of statistics encourages further high level buying. A momentum shift takes time to work through and we are not seeing it yet.
Prices to grind higher for the next six months. Especially Sydney, and Melbourne. Perth is very challenged IMO.
But if prices stay high after the supply response during the entire 2015 year, I would start to get nervous. I would probably start to classify myself a "bear".
Cutting rates will to help any more. We have the housing response and industry will reach capacity in early 2015. The response could cause over supply in 2016/17.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Hard to find any reason for Perth property to grow in the spring when it is falling back now?
FHB's in Perth are going for new builds in Baldivis and other similar outlying burbs. They can buy a house for no stamp duty, get the FHO grant and end up with lower weekly outgoings than paying rent. They end up with smaller blocks but most don't want huge backyards that need loads of looking after.
Established property is now levied with stamp duty over $430k for FHB's so there is no incentive for them to buy established.
Migration into the state is falling, we are not sure about our jobs (mining downturn) and there are shit loads of new houses being built (no supply problem). rental vacancies are up, rents are down.
Where does this 3% to 5% growth come from?
You are focusing to much on the lower end of the market.
FHB is strong and increasing in recent months. As an example 1007 FHB bought established houses in June while only 650 opted to build new. So far more established houses are being sold then built to FHB. The pickup in FHB demand in recent months in June/July also explains the higher sales volumes which are above last years levels for the same period.
Upgrades are moving back into the market after a quiet start to the year, as they sell properties to FHB they are either upgrading or downgrading. Most tend to upgrade to better locations. In the coming months you will see a surge of sales in the $600-800k price band which will fuel stronger price growth.
The reason we have plenty of construction at the cheaper end of the market sub $500k is prices in Perth are affordable compared to other cities. We have plenty of new suburbs for FHB to build or buy existing and with interest rates so low it make sense to buy rather then rent for FHB, hence why the vacancy rate is increasing.
What is happening is FHB are beating investors by buying rather then renting which is increasing losses for investors buy not being able to get enough renters to fill the vacancy rate.
As I said years ago on this forum, the only way to contain price growth is a supply side response. People need to buy/build more houses, bears said I was crazy. Anything to do with people buying/building more houses is against the bears ultra ethos, no to everything. Now we have more supply of affordable housing and strong FHB demand. Perth is able to keep a large supply of sub $500k houses as we have lots land to keep expanding into as the city grows.
However upgrades is what will fuel the price growth as competition increases for the limited supply of quality houses on the market. Nearly anything in a good location in the $600 to $800k range is snapped up quickly, particularly if in a good school catchment.
The median price has been sliding in recent months due to strong FHB activity, so many cheaper houses selling. This has already started to change and the data will reflect this in the coming months.
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