the problem with perth its full of hi viz bogans (go walking around qantas club and you'll see what i mean) bogan are known for irrational behaviour - the market can stay irrational longer then you can stay liquid. therefore jump on board people gear to the moon make those banking execs a bonus or two
bulls gave up on "strong fundamentals" and "chronic shortage"
They admit prices are only supported by the irrationality of greater fools.
Can I ask, are you the type of person who buys at the peak of the market. If so I have a few great deals for you in 6-12 months.
So the Perth market will peak in 6 - 12 months time?
You didn't answer my question Mike. Perth has been in a downturn for 18 mths now. My question was - what has caused that downturn, and what has changed fundamentally to reverse that downturn?
I can see why prices would level out, and even blip. We have had two interest rate cuts. That should be more than enough to do it. But what caused the downturn in the first place, and what has changed?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Can I ask, are you the type of person who buys at the peak of the market. If so I have a few great deals for you in 6-12 months.
So the Perth market will peak in 6 - 12 months time?
You didn't answer my question Mike. Perth has been in a downturn for 18 mths now. My question was - what has caused that downturn, and what has changed fundamentally to reverse that downturn?
I can see why prices would level out, and even blip. We have had two interest rate cuts. That should be more than enough to do it. But what caused the downturn in the first place, and what has changed?
There is no one one answer. The FBG boost brough alot of demand forward and lead to a mini boom in prices. As construction levels increased prices peaked. As so many FHB took advantage of the Govt grants, this lead to less rental demand and investors do not typicaly buy when prices are at close to peaks. As 2011 came around stock levels increased, more stock = greater choice and more competition between sellers which results in lower prices.
As the FHBG brough forward much of the demand to take advantage of the grant this lead to fewer buyers in later 2010, 2011 which is indicated in nearly every stat. Construction levels droped way off as prices were high due to the mini boom. There are many other factors like higher rates, minority government, Europe and so on but the fundemental driver for WA is population, mining boom. What do you think is going to happen if interest rates drop to prop up the eastern states in may, yet WA is already booming and seeing large increases in sales and demand, what would a further rate cut or 2 do to an already booming economy over here in the west, any guesses?
The problem is, construction levels might have droped off buy during this same peroid WA population growth grew from 42,000 people per year to being now over 60,000 per year. This population growth has sooked up much of the excess stock on the market to bring sellign stock back to average levels and cause a big rental squeeze. The high rate of migration to WA from overseas typical leads to these people renting while they get established. Overseas migrants are moving here straight into high paying jobs or they would not be allowed to migrate, ABS also reports the average overseas migrants moves to Australia with $250,000 of assetts. So migrants have the ability to pay higher rents and buy when they are ready. This is the current trend in perth, migrants taking all the rentals and affordable housing, leaving the average Australian out of the market. Welcome to the mining boom. In 2012 alone mining industry needs another 34,000 skilled workers, by end of 2013 they need 75,000 let alone the lower skilled people to support these workers and their familes.
In the new WA Labour leaders own words, "The perth property market is like a bottle of champagne, its ready to blow"
So the Perth market will peak in 6 - 12 months time?
The perth market may not peak in 6-12 months, more likely 12-18 months. I never sell at the very peaks, to try and sell at a peak is very hard because if you time it to late, prices can drop off as demand drops and your left unable to sell as you waited to long.
As an investors and if you want to sell, never try to pick the peak of the market. I always look at my properties, which one I can sell and make the most money off at that point in the market. If I can sell and make a substantial profit then I do so. Im not interested in the peak, only what I can make at a particular point in time. I am far more interested in looking at when markets are close to the bottom of a cycle, to buy. Looking for the right house to buy is not just a broad state by state or city by city figure. You need to look at each suburb, why do you see some suburbs increase greatly in value even during a down turn, markets with in markets.
You can even look for streets where recents sales have been high and prices rising quickly. Look from some streets nearby, pick some houses for sale put in some low offers and see who bites. I have put in hundreds of offers over the years and you might get 1 in 20 that will accept a lower price, recently in perth during 2011 it was more like 1 in 5.
Example I bought the worst house but in the best street of suburb in perth. I got a 4x2 for $365k, yet a few houses down a 4x2 was selling for $590k. This house did need some work, was older and run down. I spent $30k on it with some tradies I know, rendered the front, painted, update bathrooms and kitchen, cheap carpet. House now valued at $540k, this is one house I will look to sell in the next 6-12 months, maybe sooner and pocket the profits. Currently rented for $550 per week, so it provides a good return so I am tempted to keep it. That is just one example of what you can do with a little research and elbow grease.
Yes thats why I bought 2 properties and 1 block of land during the downturn, now just a few years later those same properties are worth $350,000 more in value, in 6-12 months they will gain a fair bit more. I will probably look to sell a few once the market really gets going and pocket the money.
How many properties have you bought latley, how much money have you made. Oh I also have properties in VIC, NSW, TAS all of which have double in valued since I bought them, an no I did not buy prior to the boom. Markets within markets, do your home work and you can find bargains, its not that hard.
With such investment omnipotence, and obvious wealth, why are you posting on here so often and not soaking up the sun, travelling an exotic destination, or some other pursuit?
His blog says that he's a government employee. The government is paying him to lie and spruik?
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
What do you think is going to happen if interest rates drop to prop up the eastern states in may, yet WA is already booming and seeing large increases in sales and demand, what would a further rate cut or 2 do to an already booming economy over here in the west, any guesses?
I imagine it will likely increase inequality and financial hardship for those trying to afford ownership of the fundamental human need for shelter from the elements, and who are not on the big money (the majority). I have witnessed this first hand here in Gladstone, thanks to landlords and investors taking advantage of the LNG boom.
What do you think is going to happen if interest rates drop to prop up the eastern states in may, yet WA is already booming and seeing large increases in sales and demand, what would a further rate cut or 2 do to an already booming economy over here in the west, any guesses?
I imagine it will likely increase inequality and financial hardship for those trying to afford ownership of the fundamental human need for shelter from the elements, and who are not on the big money (the majority). I have witnessed this first hand here in Gladstone, thanks to landlords and investors taking advantage of the LNG boom.
Spot on. That is why I have warned on other forums for along time now we are headed for social problems.
The prime driver of this boom in prices that I think is about to start is a simple lack of construction. It is total irresponsible by both the Federal & State Governments to allow so many workers into WA to feed the mining boom which feeds their tax take, yet at the same time they do little to house this population. It is government red tape, taxes which adds to costs for developers to bring land to the market. Oh and if you did not notice the next energy ratings which come into affect as of 1st of May in WA will add about $10,000 to the construction of a new 4x2. Just what we need, more costs.
To keep prices lower the Goverment needs to remove stamp duty as it was promised when the GST came in. Remove much of the red tape to get more land and construction building. Not only is this good for jobs but it will put long term downward pressure on prices. The reason we have booms in the past is due to a temporary spike in land sales and construction. If supply is increased over a sustained and long peroid it will provide along term increase to the housing stock, and what happens when we have alot of housing stock on the market, prices come down just as perth as seen over the last 18 months.
People might complain house prices wont rise and will decline, well you need a healthy market for the long term, not be short sighted for a quick dollar. Smart investors can make money in any market.
His blog says that he's a government employee. The government is paying him to lie and spruik?
I guess all the links I provide from offical agencies lie as well, dont let the truth get in the way of a good story hey.
Did you think that maybe I work because I enjoy my job, and just maybe as a Government employee I serve the community helping to keep you and your family safe. You might learn a thing or two if you serve your country and community as well rather then moan about how unfair the world is. Well do some thing about it, life isnt fair I see it every day. Get over it.
Spot on. That is why I have warned on other forums for along time now we are headed for social problems.
We agree.
I think that Leith Van Onselen would strongly agree with the rest of your post and I certainly agree that more should be done to house this influx in population. I have seen numerous debates arguing the point of how much increasing supply would be likely to place downward pressure on prices in an enviroment of easy credit that fuels widespread speculation. I think it would probably place some downward pressure on prices but how far would the "red tape cutting" have to go to have a really significant effect? Here in Gladstone, there has been a fairly solid supply-response (given the relatively small size of the town) so it will be interesting to see if prices come back down in the next couple of years (assuming the boom continues uninterrupted). A relative who works in mortgage broking here is run off their feet and a good half of the activity is investors.
In short, I tend to feel that in an easy credit environment, price-inflating speculation can usually expand faster than physical supply and government regulation of land use would need to be rather light to prevent demand outpacing supply. Exactly how far governments should step back away from planning is a matter of opinion I guess - if developers were given free reign, would we see developments sprawling into flood or fire-prone land, land that might have been most suitable for future infrastructure such as major power lines and highways? I would prefer to see credit more tightly regulated but perhaps some combination of both would be suitable.
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