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Perth property prices up again!; Perth up 1.7% over last 2 months
Topic Started: 2 May 2016, 04:21 PM (8,825 Views)
Mike
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http://www.businessinsider.com.au/australian-capital-city-house-prices-surged-last-month-2016-5

Elsewhere prices in Canberra and Perth rose by 1.2% and 0.5% respectively while those in Hobart and Darwin — perhaps as a result of a smaller housing markets compared to other capitals — fell by 2.0% and 1.7% respectively.

In March Perth was up 1.2% and has now backed it up with a 0.5% growth in April, 1.7% in last two months. Not bad.
Edited by Mike, 2 May 2016, 04:22 PM.
http://mike-globaleconomy.blogspot.com.au/
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Matthew
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Mike
2 May 2016, 04:21 PM
http://www.businessinsider.com.au/australian-capital-city-house-prices-surged-last-month-2016-5

Elsewhere prices in Canberra and Perth rose by 1.2% and 0.5% respectively while those in Hobart and Darwin — perhaps as a result of a smaller housing markets compared to other capitals — fell by 2.0% and 1.7% respectively.

In March Perth was up 1.2% and has now backed it up with a 0.5% growth in April, 1.7% in last two months. Not bad.
The only thing crashing is land sales. A years time and prices will be rising faster than they need to and Dimbo will be nowhere to be seen
My only hope for my three boys is that they turn out nothing at all like Chris.
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Jimbo
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Mike
2 May 2016, 04:21 PM
In March Perth was up 1.2% and has now backed it up with a 0.5% growth in April, 1.7% in last two months. Not bad.
Your maths is f*cking awful Mikey.

March 1st 595.83

April 30th 603.67

A climb of 7.84 index points.

As a percentage of 595.83, 7.84 points is 1.32%

It's a rise Mikey, I won't take that away from you, but it is not 1.7% as you claim in the OP and the thread title.

Meanwhile, down 0.53% in the current year and down 2.15% on this time last year.

Matthew
2 May 2016, 04:39 PM
The only thing crashing is land sales. A years time and prices will be rising faster than they need to and Dimbo will be nowhere to be seen
Did you manage to find anything to back up your 13 months build time claim?

Or the 1082 new dwellings for every 1000 blocks sold?
Edited by Jimbo, 2 May 2016, 04:41 PM.
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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Veritas
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Matthew
2 May 2016, 04:39 PM
The only thing crashing is land sales. A years time and prices will be rising faster than they need to and Dimbo will be nowhere to be seen
It’s such a curious argument you make.

Your thesis seems to be that because land sales are so slow now we facing an inevitable supply shortage in about a year from now.

Why do you think this? Why wouldn’t builders just built to demand as it occurs.

For your prophecy to come through we would have to see a mountain of pent up demand.

Where is that going to come from? Are you expecting another mining boom? Are you expecting another unforeseen influx of tens of thousands of overseas migrants?

Why cant the housing market just tick along building to demand?

Are you suggesting that builders will sit it out in the hope of manufacturing a massive supply shortage?
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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Jimbo
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Veritas
2 May 2016, 04:48 PM
Are you suggesting that builders will sit it out in the hope of manufacturing a massive supply shortage?
Perth had a perfect set of circumstances around 10 to 12 years ago.

Weak AUD, strong migration, slow land release and a buy to let get rich scheme which was the talk of every barbeque in the city.

Perth would have crashed and burned in the GFC if it were not for the resources construction boom.

Now we have the opposite. Plenty of land for sale, slowing migration, GBP buying $1.92 instead of $2.40, record high rental vacancies and no significant new resources construction in the pipleline.

And this.....

https://au.news.yahoo.com/thewest/wa/a/31441442/fifo-toys-traded-in-as-mining-boom-ends/

Posted Image
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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Veritas
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And this.

Matthew really doesnt get demand. I dont know why.

I think its because he doesnt understand the difference between effective demand and the other kind.

And he thinks that because something happened in 2006 it will happen in 2016 too.

Quote:
 
The problem for Western Australia and the Northern Territory is set to be a lack of demand, with population growth stalling as the mining boom winds down.

Dr Hawtrey said Australian had been seeing among the highest population growth rates of any developed country, around 2 per cent, for several years.

However, that growth rate has dropped closer to 1.5 per cent and may continue slowing, particularly as jobs in the resources sector dry up.

"The brunt of that will be felt by Western Australia and the Northern Territory, and to some degree Queensland, and that's where you'll see the really sharpest slowdown in building there in Perth," Dr Hawtrey warned.


http://www.abc.net.au/news/2015-07-20/australia-set-for-housing-oversupply-by-2018/6628408
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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Perth property prices up
This is just as the mighty Lord Shadow foretold. It looks like He nailed yet another prediction.
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Matthew
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Veritas
2 May 2016, 04:48 PM
It’s such a curious argument you make.

Your thesis seems to be that because land sales are so slow now we facing an inevitable supply shortage in about a year from now.

Why do you think this? Why wouldn’t builders just built to demand as it occurs.

For your prophecy to come through we would have to see a mountain of pent up demand.

Where is that going to come from? Are you expecting another mining boom? Are you expecting another unforeseen influx of tens of thousands of overseas migrants?

Why cant the housing market just tick along building to demand?

Are you suggesting that builders will sit it out in the hope of manufacturing a massive supply shortage?
According to the ABS every 2.5 people desire a house. And according to property industry people there is an equilibrium point where a buyers market becomes a sellers market and vice versa.

There need not be "pent up demand" the demand can remain perfectly normal at the current rate of household formation. We overbuilt. HIA said 60,000 dwellings commenced in 2 years. So we have an oversupply. People don't need to build at the moment, rent or buy, owner occupier or investor, they are spoilt for choice.

We have commenced a period of underbuilding which will lead to an undersupply in the future. At that point prices will rise.

There are only 2 ways that the current low land sales will not have an upward effect on pricing in 12 months time:

1) The physical population of WA falls on a net basis. So NIM, NOM and Net Births go net negative.
2) People stop desiring to live in houses.

Given neither of those events will occur, the answer is as simple as 1+1.
Jimbo
2 May 2016, 04:40 PM
Your maths is f*cking awful Mikey.

March 1st 595.83

April 30th 603.67

A climb of 7.84 index points.

As a percentage of 595.83, 7.84 points is 1.32%

It's a rise Mikey, I won't take that away from you, but it is not 1.7% as you claim in the OP and the thread title.

Meanwhile, down 0.53% in the current year and down 2.15% on this time last year.


So you acknowledge the movement is upward right? Not down? Not 25% down as you claimed would occur by November 2014? But up right? Good to know.

Quote:
 
Did you manage to find anything to back up your 13 months build time claim?

Or the 1082 new dwellings for every 1000 blocks sold?
Did you find any meaningful current data to say otherwise other than a 5 year old chart?

My mate works for one of Perths largest builders. The build luxury mansions that take over 18 months average to complete. Large 2 story dwellings that take up to 18 months to complete. Large single story dwellings that take over a year to complete. And small villas, units and FHB accommodation that takes less than a year. The average he says is currently 13 months. With lower sales it is fair to say that will come in as it did in 2010 / 2011. But not by a massive amount.

1082 is the number they gave me. Perhaps ask Landgate yourself and tell me where he went wrong, or acknowledge he is right, either or.
Edited by Matthew, 2 May 2016, 05:12 PM.
My only hope for my three boys is that they turn out nothing at all like Chris.
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Veritas
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Matthew
2 May 2016, 05:08 PM
According to the ABS every 2.5 people desire a house. And according to property industry people there is an equilibrium point where a buyers market becomes a sellers market and vice versa.

There need not be "pent up demand" the demand can remain perfectly normal at the current rate of household formation. We overbuilt. HIA said 60,000 dwellings commenced in 2 years. So we have an oversupply. People don't need to build at the moment, rent or buy, owner occupier or investor, they are spoilt for choice.

We have commenced a period of underbuilding which will lead to an undersupply in the future. At that point prices will rise.

There are only 2 ways that the current low land sales will not have an upward effect on pricing in 12 months time:

1) The physical population of WA falls on a net basis. So NIM, NOM and Net Births go net negative.
2) People stop desiring to live in houses.

Given neither of those events will occur, the answer is as simple as 1+1.
But why cant the market just build to demand?

Why does there have to be a pinch point?

Builders build as customers come through the door.

It doesn’t have to get to the point that the builders have waiting lists.

The only way that can happen is if there is a surge in demand caused by a mining boom or similar.

But you are not predicting that.

You are predicting a normal rate of population growth.

Why cant the builders build to the demand that eventuates? Surely they have ample capacity to do just that?
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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Jimbo
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Matthew
2 May 2016, 05:08 PM
We overbuilt. HIA said 60,000 dwellings commenced in 2 years.
According to REIWA, one of our best periods for land sales was 2013/2014.

In those two years, 29,108 block were sold.

And you reckon there were 60,000 starts.

That's 2061 new dwellings per 1000 blocks Matey.

But you reckon the new dwelling per block ratio is 1082 dwellings per 1000 blocks?
Veritas
2 May 2016, 05:16 PM
Builders build as customers come through the door.
They do in WA in general.

There have been two main exceptions.

Early to mid noughties due to factors I have already outlined.

The last few years where they have been chucking up apartment buildings all over the place. Quite a few of them still in the early stages of construction.

Many may already be sold, but I assume that whoever has bought them intends to do something with them when they are complete.

Maybe move in and a leave another empty rental? Maybe rent the apartment out, adding to the existing rental supply.

Is one 60 unit apartment block one land sale?
Edited by Jimbo, 2 May 2016, 05:32 PM.
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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