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Perth Property markets heats up; Sales surge at start of spring
Topic Started: 19 Sep 2013, 09:05 AM (4,709 Views)
Mike
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http://reiwa.com.au/home/default.aspx

I have been watching sales figures and stock on market for the last 3 weeks. Sales have increased by about 20% since winter which is absorbing the rush of stock on market for the start of spring. Stock on market is now declining again despite the surge of listings.

I am seeing alot of activity right across the market in both FHB and upgrader areas.

What is also surprising is the stock of rentals has fallen for each week out of the last 3 to 4 weeks. 3 weeks ago we had 4,100 rentals on the market now it is back down to 3,800.

Both stock on market for sale and stock on market for rentals are declining at the same time, which indicates strong demand for housing. I also noticed the median rental has increased again to $480 per week from $475.

Keep an eye on housing stock levels and land, if they keep falling over the next few weeks Perth property could see a frenzied market where the fear of missing out sets in, if that has not already occurred.

http://mike-globaleconomy.blogspot.com.au/
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doubleview
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the listed for rent stat is extremely worrying especially if your levered to the eye balls.

What you gunna do when they come for you!
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Mike
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http://www.inmycommunity.com.au/news-and-views/local-news/First-homebuyers-up-property-prices-rise/7650568/


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ELLENBROOK is fast becoming the region of choice for young new homebuyers, new statistics show. And the price of new and existing homes has begun to march higher.

First-homebuyers across the Perth metropolitan region spent a record median of $450,000 on their home in July – up more than $32,000, or 7.7 per cent, compared to the same period a year ago.

More than 400 First Home Owner Grants (FHOG) were approved in Ellenbrook in the year ended June 30. That was the second largest in the State for any specific area, trailing only Baldivis (631).

The median average house price for an established home in Ellenbrook is now $410,000. Average unit prices are $367,500 and the median price for a vacant block is $218,000.

Urban Development Institute of Australia (WA division) CEO Debra Goostrey said many first-homebuyers and investors were competing in the same sub-$600,000 market, which was forcing prices up. Ms Goostrey said there were more than 6000 FHOG applications in the 12 months ended June 30 – up more than 54 per cent year on year and almost twice as many as two years ago.

Grant applications for established dwellings had climbed 22 per cent.

“With mortgage rates of around 5 per cent, applications for the First Home Owner Grant have increased throughout 2013, despite the rental market vacancy rate lifting from 1.9 to 3.1 per cent over the year,” she said.

According to the Australian Bureau of Statistics, established house prices in Perth rose more than 11 per cent in the year ended June 30 – the fastest pace in the nation.

http://www.treasury.wa.gov.au/cms/uploadedFiles/_Treasury/Economic_Data/fhog_data.xls?

FHOG increased in July again even higher then the 54% increase recorded in June and August figures are about the same as June.

The market has continued its strength from earlier in the year through winter. This is why we have seen no increase in stock levels which would normally occur in the buildup to spring.

Perth is starting the busy spring and summer selling periods with 1500 les properties on the market then last year. The already low stock levels of 2012 resulted in a price surge of 11% as per the ABS.

In 2013 we have lower stock levels and lower rates with sales constantly 20 to 30% higher then 2012 levels. If stock continues to fall over spring and summer we could see some rapid price rises greater then last years 11% growth.
Edited by Mike, 19 Sep 2013, 11:28 AM.
http://mike-globaleconomy.blogspot.com.au/
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newjez
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I expected it to be a bit hotter actually, what with the changes to the FHBG. I guess the uncertainty of the date may have slowed things a bit. It now seems to be going through in Oct, so I would expect a bit more of a rush over the next month, especially in the unit market.
Edited by newjez, 19 Sep 2013, 12:11 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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Perthite
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Hmmm actually there is very little activity in Ellenbrook and Averley.

What no link to rpdata Mike. Daily index must be crap still.
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MMM
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Did you stop to think Mike that maybe the rush is to get in before the grants end on established homes in a few weeks time and also consider that it was to end earlier than this and was delayed, so they have rushed in hard over the last few months trying to get a cheap freebie handout.
I wrote something about this in the wa AAA credit rating thread ,you might lke to read it.
Anyway ,not sure what to make of rents vancancies decreasing, not that I have looked into it ,just going of what you have said, perhaps people are unaware of the extent of the mining decline and extent of job loses and have moved there hoping to find work after losing there job in melbourne or some other state. a mate of mine moved over last year and was renting but I have not spoken to him in some time for an update.with the grants for established homes ending soon an encouragement of creating more housing through grants of new homes only being increased for first home buyers, I see vancancy rates rising and rents falling, not to mention from massive job losses we have seen there and will continue to see.
It takes time for these loses to really start to impact on the market, if somebody losses their job and for some higher paying mining jobs, they dont go out and sell there home tommorow, they look for a new job, some will find one many others will not, some will be forced to take a lesser paying job because thats all that will be available for those that manage to find another job, others will sell there hsv and fpv and other toys off first before their house, many others have loans not only on their house but their boat or jetski or hsv, these will go first long before the house will ,others will only find part time work and others no work at all.
But once evrything thing else goes the houses will be next, no rocket science Mike, just plain fact . This could effect the rental market over a period and may also be what you are seeing now as far as rentals go ,but with a backlog of repossed homes building up it wont last long.

I dont like to see people losing out but I dont really see it any other way. those are forced to sell out early will end up better off and owing less than those that try and hang on longer , just like we have seen in parts of queensland, and they had no mining boom or bust for that matter.
look at house price of wa compared to queensland areas of say ten years back and maybe work out what they will be worth in a few years time.
were they the same ten yeras ago or worth more or less, I dont know but this will give you an indication of where they will be headed or even compare them with other states from many years ago.
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Mike
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MMM
19 Sep 2013, 12:28 PM
Did you stop to think Mike that maybe the rush is to get in before the grants end on established homes in a few weeks time and also consider that it was to end earlier than this and was delayed, so they have rushed in hard over the last few months trying to get a cheap freebie handout.
I wrote something about this in the wa AAA credit rating thread ,you might lke to read it.
The changes to the FHOG was not announced until the August 8th state budget and only leaked a few days earlier.

So that would not affect the high results for June and the even higher demand in July, FHOG actually reduced a little in August. Demand is already at high levels for FHOG and I doubt they will go higher as Perth does not have enough lower priced housing to buy at higher rates. To get more FHB into properties they need to build new properties, so we could start to see even higher FHB when the grant does change over.
Perthite
19 Sep 2013, 12:16 PM

What no link to rpdata Mike. Daily index must be crap still.
It is bouncing around a lot which I think is linked to the high volume of FHB in the market. The market has turned again towards more FHB over June, July and August. Earlier in the year it was upgraders buying after selling to FHB in the 2nd half of 2012.

You will see more upgraders buying now and in the months to come as the contracts settle on so many established houses being sold to FHB, the previous owners either upgrade or downgrade depending on circumstances.

The reason why we in Perth will see sustained growth over a longer period (next 2 years) is our market is built on the back of strong FHB demand, strong upgrader market along with investors. Cities like Sydney which are experience rapid price growth on the back of almost 50% investor buying would have me concerned as it may not be based on fundamentals. Prices could well over shoot in Sydney driven by frenzied buying.

Would be interesting to see the historical investor activity for Sydney compared to other boom periods. The lack of FHB in that market is a concern which to me raises questions about the long term stability of the market. I am not local so not up to date on what is going on at ground level other then shortage of housing. I do have one property in Sydney in Castle Hill. So I will leave it to the Sydney bulls to keep us informed.
Edited by Mike, 19 Sep 2013, 01:41 PM.
http://mike-globaleconomy.blogspot.com.au/
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willy_nilly
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Vacany rates seems to be going to the moon in Perth..
http://www.sqmresearch.com.au/graph_vacancy.php?sfx=&region=wa%3A%3APerth+City&t=1

http://www.sqmresearch.com.au/graph_vacancy.php?region=wa%3A%3APerth&type=c&t=1
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MMM
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Like I mentioned in my post I have not looked closely at the wa market for quite some time and am not familiar as to when these grant announcements have been made, but the only reason you have people upgrading in larger numbers is when larger numbers of first home buyers have been active in the market which increses prices and then prompts people to upgrade.

its always been the way when we have seen decent increases in real estate prices, a trickle up effect if you will that starts at the bottom and works its way up. when they stop coming it often effects the higher properties first and then tends to trickle down to the lower end properties. soryy I could not be bothered right now, buy somebody there may like to find us the median capital citiy prices of say ten years ago , and then compare them with today median.
I dont know of hand ,but was the median of say brisbane on par with perth ten years ago, was it cheaper or more expensive and how do they compare now after the mining boom and the effect it has had on house prices in WA, you may also like to look into rental prices in the capitals of ten years prior and see how much different ratio wise they are from today.
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Blondie girl
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Yeah Mike

I agree Perth has performed very well , it's exceeded my epectations, I am an optimist but I'm cautious generally. It's going to be interesting to observe what happens with the supply issues in homes & land available.
I can understand that the influx of FHB will be rushing to make make the most of it..

What happens next well time will tell.

Has the vacancy rate gone down? ..not sure will check on that one.
willy_nilly
19 Sep 2013, 01:52 PM
I'm confused willy wonka

This is old data ..2009!
:bl:



MMM
19 Sep 2013, 02:21 PM
Like I mentioned in my post I have not looked closely at the wa market for quite some time and am not familiar as to when these grant announcements have been made, but the only reason you have people upgrading in larger numbers is when larger numbers of first home buyers have been active in the market which increses prices and then prompts people to upgrade.

its always been the way when we have seen decent increases in real estate prices, a trickle up effect if you will that starts at the bottom and works its way up. when they stop coming it often effects the higher properties first and then tends to trickle down to the lower end properties. soryy I could not be bothered right now, buy somebody there may like to find us the median capital citiy prices of say ten years ago , and then compare them with today median.
I dont know of hand ,but was the median of say brisbane on par with perth ten years ago, was it cheaper or more expensive and how do they compare now after the mining boom and the effect it has had on house prices in WA, you may also like to look into rental prices in the capitals of ten years prior and see how much different ratio wise they are from today.
You better check that gold situation, otherwise you'll be doing your dough in.
..it's better than losing $$ for the last 2 yrs...

Edited by Blondie girl, 19 Sep 2013, 02:30 PM.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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