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WA population growth has crashed.; Slowest in 8 years and forecast to fall.
Topic Started: 20 Dec 2014, 12:45 PM (14,082 Views)
skamy
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Jimbo
12 Jan 2015, 06:26 PM
Was I shown to be wrong? Are all of these apartment buildings going up in the city already sold?


Is that right? Have you spoken to the 13,000 or so vendors to find out why they are selling?

Numbers started to fall back at the beginning of December (as they do just before Christmas). They are now climbing again.
The only place there is a slight oversupply is in units in the inner city and this has been there for quite some time. It has not nor will it crash the market. Why because the land market is very very strong and the upgrader market is showing signs of life again after years in the doldrums.

The truth is that the majority of units are indeed sold - they have to be getting funding from the banks is very difficult - people still live under the GFC cloud - no bank is gonna risk money in property until the GFC is much much further behind us.

Do you seriously believe banks would fund developments that are at risk of underselling?

What is happening is that unit building will slow down again and that is good for long term investors as nothing is surer than that we will run into an under supply in a few years.
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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Mike
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Jimbo
12 Jan 2015, 06:26 PM
Was I shown to be wrong? Are all of these apartment buildings going up in the city already sold?


Is that right? Have you spoken to the 13,000 or so vendors to find out why they are selling?

Numbers started to fall back at the beginning of December (as they do just before Christmas). They are now climbing again.
No listings have not increased, can you show me data that shows listings are increasing again?

I suspect they will as Feb/March are typically very good selling months so vendors will put more properties on the market but there is no data for this yet. Seems you have seen it thought so link it please.

Just as listing normally slow down over the December/Christmas period listing also rise from the start of September onwards for people to sell properties in Spring so it may settle prior to the Christmas/New Year. This is why since spring perth prices increased by 1.4% in November and then 2.1% in December. Rush of sales and properties on the market with the middle to high end doing very well. I expect this trend to continue over Jan/Feb/March.

Can you prove that the apartment builds are not mostly sold, meaning more then 50% remain unsold in anyone building? If any of these buildings require finance from lenders then typically they need 60% off the plan sales prior to the banks releasing funds for construction. This is often why Australia avoids huge overbuilding in apartments, it does happen to some degree as it is very hard for anyone to pick how strong demand is and will be. Some lenders insist on 80% off the plan sales.

So to answer your question yes, nearly all of those apartment buildings are mostly sold, meaning over 60% would be sold prior to construction commencing. The only time this does not happen is if it is soley funded without any lenders, which is a large risk and only completed by largest of construction companies/developers.
http://mike-globaleconomy.blogspot.com.au/
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stubby
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Mike
12 Jan 2015, 06:54 PM
Can you prove that the apartment builds are not mostly sold, meaning more then 50% remain unsold in anyone building? If any of these buildings require finance from lenders then typically they need 60% off the plan sales prior to the banks releasing funds for construction. This is often why Australia avoids huge overbuilding in apartments, it does happen to some degree as it is very hard for anyone to pick how strong demand is and will be. Some lenders insist on 80% off the plan sales.

So to answer your question yes, nearly all of those apartment buildings are mostly sold, meaning over 60% would be sold prior to construction commencing. The only time this does not happen is if it is soley funded without any lenders, which is a large risk and only completed by largest of construction companies/developers.
Evidence of recent sales history, apartment-complex by apartment-complex, is what any rational investor would insist on, at this rather delicate point in the recent health of the Perth unit sales market.

Do you have it, Mike?!?
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skamy
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stubby
12 Jan 2015, 07:00 PM
Evidence of recent sales history, apartment-complex by apartment-complex, is what any rational investor would insist on, at this rather delicate point in the recent health of the Perth unit sales market.

Do you have it, Mike?!?
How ridiculous of you to ask this? Are you incapable of googling it yourself?

It is easy for you to get this information if you wish. The facts are that banks are very cautious and sales are needed before banks will fund. When the number of sales is reached that allows the developer to build they can then offer vastly reduced deposits.

This has the effect of slowing the market as new developments cannot compete until these existing developments are almost fully sold.

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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So even the bulls don't know exactly what sales precommitment all these new apartment developments require before the banks will finance them.

Interesting.
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
12 Jan 2015, 07:12 PM
So even the bulls don't know exactly what sales precommitment all these new apartment developments require before the banks will finance them.

Interesting.
Yet another silly assumption about the knowledge of others, while blithely ignoring your own ignorance on the topic. This is despite the fact that it is you who is making these grandiose predictions of oversupply and 20% plus price drops in this wealthy rapidly growing city.

Both Mike and I are predicting a slow growing buyers market which is a far more reasonable position to take given the fundamentals.
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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stubby
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skamy
12 Jan 2015, 07:08 PM
How ridiculous of you to ask this? Are you incapable of googling it yourself?

It is easy for you to get this information if you wish. The facts are that banks are very cautious and sales are needed before banks will fund. When the number of sales is reached that allows the developer to build they can then offer vastly reduced deposits.

This has the effect of slowing the market as new developments cannot compete until these existing developments are almost fully sold.
Why is it ridiculous of me to ask it of Mike, the uber-bull of Perth?

I'd rather expect that he, of all people, would gather such info as a matter of course, and be able to dispense it at the drop of a hat, particularly if it would prove his ongoing premise of how boom-like the Perth market continues to be, despite all doubts to the contrary...

Again, where is the *evidence* of recent sales success in Perth's recent-build unit market??
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skamy
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stubby
12 Jan 2015, 07:21 PM
Why is it ridiculous of me to ask it of Mike, the uber-bull of Perth?

I'd rather expect that he, of all people, would gather such info as a matter of course, and be able to dispense it at the drop of a hat, particularly if it would prove his ongoing premise of how boom-like the Perth market continues to be, despite all doubts to the contrary...

Again, where is the *evidence* of recent sales success in Perth's recent-build unit market??
You are so full of incorrect assumptions about what other people should be providing for you.

If you are interested in how units sell do your own homework - you can take or leave Mike's predictions anytime, but only a child wants to be spoon fed the market.

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
12 Jan 2015, 07:18 PM
Yet another silly assumption about the knowledge of others, while blithely ignoring your own ignorance on the topic. This is despite the fact that it is you who is making these grandiose predictions of oversupply and 20% plus price drops in this wealthy rapidly growing city.

Both Mike and I are predicting a slow growing buyers market which is a far more reasonable position to take given the fundamentals.
Actually, JR was predicting falls. Your on your own again sue Allen.
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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stubby
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skamy
12 Jan 2015, 07:25 PM
You are so full of incorrect assumptions about what other people should be providing for you.
No, Mike is.

He asked, "Can you prove that the apartment builds are not mostly sold, meaning more then 50% remain unsold in anyone building?" And the answer is no, don't care (beyond this discussion), am not an investor in the Perth market.

Rather it is Mike's case to prove that those apartment builds *are* sold. He's the one positing that the overall Perth market is still selling swimmingly, e.g. "Rush of sales and properties on the market with the middle to high end doing very well. I expect this trend to continue over Jan/Feb/March."

All I'm asking for is a bit of proof... :lol :lol :lol
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