It was you who was dumb Peter - selling good Mt Lawley property in the middle of a downturn and expecting another 40% price crash. That is what I call dumb.
It is sensible to remove a sale from a bad market - people's homes are their biggest investment, why throw them away in a low confidence market unless they are upgrading?
Wow, just wow, i got top dollar for the Mount Lawley property, 1 was up from $99,000 to $415,000.
But hey.
Margaret River was just starting to wake from its slumber.
So, you have compared the hottest selling period to the slowest selling period?
People sell in Nov so they can get their kids settled in a new school year.
There is a reason we compare like for like.
Fair point the market is not dead, but fabrication will not make it appear livelier than it is.
You miss the point.
I'm not concerned with sales volumes. Look at the snapshots over the past 9 months and it shows a steady decline in housing stock, which is down nearly 16% and will likely hit 20% over the full 12 months.
This is despite prior to November 2015 an approval for construction rate of 25,000 properties per year, over 2016 this has fallen to 20,000 and recently below 20,000.
As Jimbo notes rentals have increased by 3000 properties however this does not come close to making up for the people who have left WA some 10,000 in the last quarter, lower population growth, rising unemployment. Despite all these factors which should be leading to a large increase in housing stock we see the reverse.
Property sales are hovering around the 2500-2750 per month which way above present construction levels of under 20,000. This is likely the biggest cause of the decline in housing stock as sales even though subdued are still significantly above replacement rate over the past 12 months.
So as we can see the stock on market situation is set to get a lot worse and we will see large fall in housing stock over the rest of 2016/17. I expect to see a reduction of 5000 properties over 2017, to bring the Perth market well under 10,000 properties. Anything under 12,000 is considered a tight market for supply in past for Perth.
However it will also take time to eat away at rental stock, this will begin to occur as housing stock for sale approaches 12,000. Around this point we will begin to see a steady fall in rental stock as new supply is only meeting 50% of demand even in a slow market.
The supply and demand equation is now heavily in favor of falling supply which in turn will place preasure on prices for both properties for sale and rentals.
Unless Perth almost doubles it present construction rate housing stock will fall to levels which will support price growth in 12 months time and rental stock will fall much quicker then most will anticipate. Keep in mind at present rates of rental on a weekly basis Perth has about 10 weeks of rental supply, any large decrease in new supply will eat away at this over supply over the coming 12-18 months.
Property sales are hovering around the 2500-2750 per month which way above present construction levels of under 20,000. This is likely the biggest cause of the decline in housing stock as sales even though subdued are still significantly above replacement rate over the past 12 months.
Property sales are mainly people moving from one house to another. 2500 sales a month does not remove 2,500 properties from the 20,000 construction starts. Have you not considered that housing starts are related to demand? Fewer people wanting to buy house and land packages, fewer starts. If demand picks up, more house and land packages will sell and soak up that demand.
Quote:
So as we can see the stock on market situation is set to get a lot worse and we will see large fall in housing stock over the rest of 2016/17. I expect to see a reduction of 5000 properties over 2017, to bring the Perth market well under 10,000 properties. Anything under 12,000 is considered a tight market for supply in past for Perth.
You are basing this on a very flawed logic Mike. Stock on the market fell last winter as well before climbing sharply in the spring. Same thing happened in 2014. Realestate.com.au added over 2000 listings in October 2014 & 2015.
Comparing with this time last year, there are more properties listed for sale than there were in the same week.
There are 3000 more rentals listed.
Quote:
However it will also take time to eat away at rental stock, this will begin to occur as housing stock for sale approaches 12,000. Around this point we will begin to see a steady fall in rental stock as new supply is only meeting 50% of demand even in a slow market.
Sorry Mike, you have lost me there? Are you saying people will be forced to rent as houses for sale run out? Are you saying that there will be twice as many people looking to buy houses than there are houses available?
Mike
13 Aug 2016, 02:03 PM
Unless Perth almost doubles it present construction rate housing stock will fall to levels which will support price growth in 12 months time and rental stock will fall much quicker then most will anticipate.
So an annual population growth rate of 20,000 (latest ABS numbers) can't be met with 15,000 construction starts?
Quote:
Keep in mind at present rates of rental on a weekly basis Perth has about 10 weeks of rental supply, any large decrease in new supply will eat away at this over supply over the coming 12-18 months.
I'd like to see your maths on this Mike. Are you saying that everyone who rented in Perth this week has never rented a property before in Perth?
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'm not concerned with sales volumes. Look at the snapshots over the past 9 months and it shows a steady decline in housing stock, which is down nearly 16% and will likely hit 20% over the full 12 months.
This is despite prior to November 2015 an approval for construction rate of 25,000 properties per year, over 2016 this has fallen to 20,000 and recently below 20,000.
As Jimbo notes rentals have increased by 3000 properties however this does not come close to making up for the people who have left WA some 10,000 in the last quarter, lower population growth, rising unemployment. Despite all these factors which should be leading to a large increase in housing stock we see the reverse.
Property sales are hovering around the 2500-2750 per month which way above present construction levels of under 20,000. This is likely the biggest cause of the decline in housing stock as sales even though subdued are still significantly above replacement rate over the past 12 months.
So as we can see the stock on market situation is set to get a lot worse and we will see large fall in housing stock over the rest of 2016/17. I expect to see a reduction of 5000 properties over 2017, to bring the Perth market well under 10,000 properties. Anything under 12,000 is considered a tight market for supply in past for Perth.
However it will also take time to eat away at rental stock, this will begin to occur as housing stock for sale approaches 12,000. Around this point we will begin to see a steady fall in rental stock as new supply is only meeting 50% of demand even in a slow market.
The supply and demand equation is now heavily in favor of falling supply which in turn will place preasure on prices for both properties for sale and rentals.
Unless Perth almost doubles it present construction rate housing stock will fall to levels which will support price growth in 12 months time and rental stock will fall much quicker then most will anticipate. Keep in mind at present rates of rental on a weekly basis Perth has about 10 weeks of rental supply, any large decrease in new supply will eat away at this over supply over the coming 12-18 months.
All part of the property cycle hey?
Except wa looks a little off cycle.
There is nothing out there to magically make everything okay. Perth is in a slump, and will remain so.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Until the combined total of rentals and listings drops meaningfully there will be no recovery in the Perth market. The current situation is a shitload of landlords reluctant to sell their properties at a loss into a falling market so instead they continue to watch their rental fall in value while trying to attract a tenant. If housing prices ever start to recover in Perth there will be no shortage of landlords wanting to get out of the IP game, thereby keeping stock on market inflated.
Until the combined total of rentals and listings drops meaningfully there will be no recovery in the Perth market. The current situation is a shitload of landlords reluctant to sell their properties at a loss into a falling market so instead they continue to watch their rental fall in value while trying to attract a tenant. If housing prices ever start to recover in Perth there will be no shortage of landlords wanting to get out of the IP game, thereby keeping stock on market inflated.
Those rents not so sticky now elastic.
We have seen Mike post lately about sales listings dropping. It may be the case where those trying to sell did not achieve their desired result and have decided to rent it out for now in the hope the market improves. And this may be why even after three and a half years of rent falls and rising rental listings, that we saw the largest rise in April from memery for any of those months, and where over the year rental listings have risen by over 3,000 , also the fastest rise of any year I believe.
How realistic is it for those hoping the market will improve by holding out ? Where will the improvements come from ? Another mining boom ? Another construction boom ? The lowering of interest rates ?
Perth is now the guinea pig for Australia. Seeing as it is so far the only capital to hit the peak of the construction boom, we will now get to see what real jobs are left after this construction boom. While it may not be the best example, is it none the less an example, and the only one we have so far to test these waters.
We have seen Mike post lately about sales listings dropping. It may be the case where those trying to sell did not achieve their desired result and have decided to rent it out for now in the hope the market improves. And this may be why even after three and a half years of rent falls and rising rental listings, that we saw the largest rise in April from memery for any of those months, and where over the year rental listings have risen by over 3,000 , also the fastest rise of any year I believe.
How realistic is it for those hoping the market will improve by holding out ? Where will the improvements come from ? Another mining boom ? Another construction boom ? The lowering of interest rates ?
Perth is now the guinea pig for Australia. Seeing as it is so far the only capital to hit the peak of the construction boom, we will now get to see what real jobs are left after this construction boom. While it may not be the best example, is it none the less an example, and the only one we have so far to test these waters.
Perth property is currently down 10% from max.
But nothing terrible has happened.
Growth has crashed.
Unemployment is reasonable.
Companies aren't going bust.
No dramas at all, plus interest rates at an all-time low.
This is like watching a slow motion car crash.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
No dramas at all, plus interest rates at an all-time low.
This is like watching a slow motion car crash.
Just listed my new Perth investment property last Wednesday.
70 views, and 4 bookings, already at 5.4% yield , hopefully get into the 10% in a week or two. Prices haven't really moved for 10 years..... but if I can manage 5% with no effort..... good times ahead ! Perth market prime for the picking,
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