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The Perth Property Crash Thread; Let us enjoy the inevitable collapse as it unfolds in WA
Topic Started: 13 Aug 2014, 12:28 AM (89,600 Views)
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14 Jan 2015, 10:22 PM
Over the past 5 years or so, I personally know of around 16 FHB’s in Perth that have taken what ever government-developer grants they can get their hands on, then buy it, live in it for 3 months to qualify for the grants (or what have you).

These FHB’s then become “investment” buyers when they rent it out, (after the required 3 months of living in it) move back home to live with mum and dad and reap the rewards of negative gearing (especially on new homes that have higher rates of depreciation)

Sometime thereafter depending on bank rates moving between various lenders, they re-finance their home to a new lender at a better rate and as an “Investment loan” to ensure they scoop up the interest payments as tax deductions for Negative Gearing.

So they gain the double whammy effect:
1. They get the FHB grants from the government-Developer (AKA tax payer)
2. They get the tax write offs from the government (AKA tax payer) via NG.

Plus they also get a home cooked meal every night and mum still does their washing and Dad does the BBQ on the weekends. Sweet deal huh?
Sounds great well done.

I prefer to be positively geared and actually making money on my investments. You do know negative means negative.

When were you planning on it becoming postive ?

Your not concerned at all with the rental drops or the level of vacancy rates. They look set to go much higher dont you think.
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skamy
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peter fraser
14 Jan 2015, 08:25 PM
The graph of ASKING rents has fallen consistently for almost two years, but has now turned upward.

Here it is again if you haven't seen it.
http://www.sqmresearch.com.au/graph_median_rent_weeks.php?region=wa%3A%3APerth&type=c&t=1

Why?

All four have turned at the same time.
Perth is still growing in population and unemployment is very low, rents wont stay down for ever. Despite what people think there is a lot of work here.
Don't forget the record volumes of resources are being exported and whether the profits are down or not - people are needed and are busy working and earning.

All the doom and gloom about Perth is a drama for the media - rents are down from really really high prices and the rest of Perth is just getting back to a bit of normality after the GFC and the mining boom. There is lots of big projects starting next year and lots of home building - I cannot see unemployment rising much.

Confidence is down with all the negative talk for sure but that is about it.

Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Veritas
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skamy
15 Jan 2015, 02:41 AM
Perth is still growing in population and unemployment is very low, rents wont stay down for ever. Despite what people think there is a lot of work here.
Don't forget the record volumes of resources are being exported and whether the profits are down or not - people are needed and are busy working and earning.

All the doom and gloom about Perth is a drama for the media - rents are down from really really high prices and the rest of Perth is just getting back to a bit of normality after the GFC and the mining boom. There is lots of big projects starting next year and lots of home building - I cannot see unemployment rising much.

Confidence is down with all the negative talk for sure but that is about it.
Posted Image
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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skamy
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Veritas
15 Jan 2015, 02:46 AM
Posted Image
You have been showing this pic for over two years now anytime anyone tells you that your cheap house fantasy is as likely as pigs flying.

Over and over and over again you fall for the drama queens - tell me Veritas how can you possible expect a crash a market like Perth's, people have low debt high rental yields low unemployment huge savings, no house price rises of any size for 7 years etc etc.

Even the pessimists are only predicting growth to fall to 2.5% and unemployment to rise to 5.2%. These are still strong fundamental Veritas - there will be no crash just as there has been no crash everytime you have predicted this for years.

Australia is in fact different to Ireland - very different indeed - and the eejits that sold you that tale should be shot. How much money have they cost you by deferring your decision to buy for 3-4 years.

The doomers are like those funeral insurance sales people, once they have got you - people feel trapped as they cannot stand the thought of losing all that they have already paid.

People are afraid to let go of the fantasy because they have to face the fact they have made bad decisions and it has cost them a hefty price. Look at the Sydneysiders - who doomed and gloomed away their opportunity to buy in a downturned market. Do you seriously believe Perth will stay in a downturn for ever? It has been 7 years now of low house prices.
Edited by skamy, 15 Jan 2015, 03:06 AM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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newjez
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skamy
15 Jan 2015, 02:41 AM
Perth is still growing in population and unemployment is very low, rents wont stay down for ever. Despite what people think there is a lot of work here.
Don't forget the record volumes of resources are being exported and whether the profits are down or not - people are needed and are busy working and earning.

All the doom and gloom about Perth is a drama for the media - rents are down from really really high prices and the rest of Perth is just getting back to a bit of normality after the GFC and the mining boom. There is lots of big projects starting next year and lots of home building - I cannot see unemployment rising much.

Confidence is down with all the negative talk for sure but that is about it.
The question was skamy, why the sudden uptick? As nothing has really changed, despite mikes hot December, its probably a technical glitch. Re post the figures in a months time peter and we will see.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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My anecdotal findings in Western Australia is that its getting harder to find work in general. I think a lot of people are a little dazed at the moment as to why they cant find a job and are relying on partners/savings/credit to pull them through for now.

I’m surprised participation rate increased, jobs increased but was also able to lower unemployment? Sounds like major number wang to me. Double positive and way over the top.

All I can say is that the eastern states must be having a major boom currently because there’s only been job loses in WA.

I’m familiar with a rather large recruitment company that specifically fills jobs for the mining sector and well they are having a terrible year or so that predates commodity crash.

And they are in bed with many big mining companies. There just aren’t as many jobs to be filled and its weighing on their group heavily now.

Maybe jobs haven’t been lost but it’s not expanding. And further more indirect jobs are tanking.

I list another company, owned by relatives who own a big machinery and construction company in northwest. They are hitting the rails hard. They haven’t fired anyone but several hundred staff aren’t returning to work. Only the needy and loyal remain.

And they use to buy a lot of equipment and construction items from perth. Another friend a carpenter has lost a lot of business in the northwest from the decline in my relatives business.

The only thing that remains are government construction and abundant apartments / housing which has oddly boomed all over Perth metro area. When that ends its going to hit hard here.

Received quotes to redo a large driveway at our warehouse south of Perth. About 1600m2.

3 out of the 4 people quoting would slash the price considerably if they could start work immediately (next week) as they simply have no other work currently.

This is very strange conditions compared to 2010 when we would have to beg to get work down or splash cash to retain workers for more than a month.

FMG is doing rather large cuts to their food service ( the industry I’m involved in).

They are calling for 10%-20% cuts from suppliers and are due to sack majority of food prep personal in the northwest and are opting for processed food from just about anywhere in Australia.

Basically they will be buying cheaper foods and sacking high priced on site cooks etc. It’s just that desperate for FMG.

Jobs and wages are being slashed everywhere.

Let the good times roll.
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TheTruth
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newjez
15 Jan 2015, 03:16 AM
As nothing has really changed
So lets get this straight, in the face of data which contradicts your world view you want to retreat to a completely unsubstantiated claim?

Do you consider yourself a thinking man?
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newjez
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TheTruth
15 Jan 2015, 10:17 PM
So lets get this straight, in the face of data which contradicts your world view you want to retreat to a completely unsubstantiated claim?

Do you consider yourself a thinking man?
Have you seen the Perth data?

Interesting thread for a different perspective
http://www.pomsinoz.com/forum/jobs-careers/226128-my-kingdom-job.html
Edited by newjez, 15 Jan 2015, 10:37 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Perth homebuyers fight to live in prized school zones
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Jimbo
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Alex Barton
21 Jan 2015, 04:43 PM
This is a "bear shits in woods" story if ever I read one.

Houses near the best schools attract a premium. No shit Sherlock.
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.
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