Anyone else looking in Perth at the moment?

[redwing]

From the REIWA web-site

Perth market recovers in June: trade-up buyers return; rents soften
10 July 2009

Preliminary data released today by the Real Estate Institute of Western Australia show that Perth’s median sale price for homes grew by $15,000, or around 3.5 per cent, in the June quarter.

This growth rate brings Perth’s median house price to around $445,000, on the revised median of $430,000 for March.

REIWA President Rob Druitt said the growth trend was being helped by a return to the market of the trade-up buyers.

“Much of the recovery in the median house price over the last six months can be attributed to increasing trade-up activity, and this is reflected in the distribution of sales tending towards more expensive properties,” Mr Druitt said.

Mr Druitt said it was worth noting that Perth’s median house price had recovered virtually all of its fall from the second half of 2008, with the current median price being just under the figure of $448,000 from June last year.

“It may well be the case that the preliminary median of $445,000 is exceeded once all settled sales data is received over the next few months,” Mr Druitt said.

The overall number of properties on the market dropped to 12,800 at the end of June, including 2,100 blocks of land. This figure is down 15 per cent on the end of March and 26 per cent below the end of June last year.

“At the current rate of depletion, properties for sale, coupled with the expected surge of first home buyers before the Commonwealth boost ends on 30 September, should see the market move back into a state of equilibrium between supply and demand during the September quarter,” Mr Druitt said.

The average number of selling days for the metropolitan area fell by 7 days in the June quarter, down to 70. There were notable declines in selling days in a number of areas, including Belmont (down 20 to 57 days), Stirling East (down 18 to 58 days), and the north-east area of Wanneroo (down 16 days to 54 days).

RENTS

The availability of rental properties has increased, with the vacancy rate growing to 3.6 per cent in the quarter.

This has had the effect of lowering the median rental payments for houses by around $10, to a median of $360 per week. However, rents for units and apartments remained unchanged at a median of $350 per week

“The increase in the vacancy rate is significant, having grown 0.7 per cent on March to a level that is now higher than usual for Perth, and it’s possible this vacancy rate will increase further during the September quarter as more renters become first home buyers and as some of the retrenched mine workers move back east,” Mr Druitt said.

 

[whitey]

If you are interested in Perth, perhaps I could suggest you look at Quinns Rocks too?

Its 35km's from the CBD, but its right on the coastline. Its next to Mindarie, which is a sought after area. It has a great beach. The have extended Marmion avenue all the way through to Yanchep which has been earmarked as one of Perths future "hubs". They are going to extend the railway line to Butler, giving Quinns access to both Clarkson and Butler railway station. Its close to Joondalup which is also growing. They are building the industrial park in Neerabup which is going to bring additional work to the area. Jindalee, which is right next door, is also seeing a lot of private investment. They are building shops and what looks like a small marina there. Eventually the Mitchell Freeway will extend past it too

I do love Quinns - historically my favourite IP suburb, so good to see it getting a mention! More new Quinns than Old Quinns, actually. Just avoid the dumpy Norfolk estate bit.

Prices for older 3*1 seem to be down from 370-380K two years ago to 330K last I checked. These were selling for 210K in 2004, but I think at the current prices they represent reasonable value. I'm holding two 3*1's and getting $280/week, which is nothing special (4.4% gross return at current prices).

I like the idea of beachside - the ocean isn't going away, and it's the only affordable beachside suburb left north of Perth. Marmion Ave is in as mentioned to Yanchep, the freeway is getting closer and I'm hoping the Jindalee cafe strip (if it ever gets built) will raise the tone of the area.

Does anyone know the timeframes for Butler railway station, freeway, Jindalee shops or the industrial park?

It would be fair to say that all this has moved more slowly than I was expecting when I invested five years ago, and that CG has not been what I hoped it would be. But I guess that means that if all the reasons above for anticipated CG are realistic then the suburb might still represent reasonable buying in 2009.

 

[Aaron Sice]

his thoughts pretty much aligned to what I have concluded myself. will fill you in tomorrow - remind me

most of the posters on here won't like it

did you beat me to taking Dazz out for a steak....?

 

[Ausprop]

ha ha, no but the philisophy is scarily similar

 

[jaycee]

so are you going to share it ? or ws just digging it in enough ?

 

[Ausprop]

too much build up...

he just said, buy commercial property with positive cashflow. sit on it. in 20 years time your current 9% yield will be 40%. resi too many headaches. biggest thing... cash is king. with a comm property you can sail thru times like now as no one will force you to sell if you aren't under cashflow pressures.

I have seen all this in practice now - even with my own properties. the jewel inthe crown is still a 4000sqm block of horrible industrial dirt with a tin shed on it. no worries there and it actually generates an income. meanwhile I have a vacant property following a trashing, another one that evicted a bunxh of morons on drugs today, others where I can't even raise my rent by ten bucks a week!

 

[jaycee]

Fair enough, not that bitter a pill to swallow.

 

[Ausprop]

ya reckon? most posters on here are in love with RIPs

 

[jaycee]

can I get into this sort ofcommercial now ? with my limited budget or do I have to do some accumulation first to get them figures hes talking about ?

 

[Ausprop]

hard to know without knowing your budget... around $1m I believe are some good properties

 

[eggnog]

hard bits coming up with the depost. 30% of 1M is still 300k. quite a bit for someone that doesn't have much behind them / is new to this game. I'd even go out on a limb and guess that the bulk of people with resi IPs don't even have that kind of free usable equity.

 

[INVSTOR]

hard to know without knowing your budget... around $1m I believe are some good properties

If a bank is willing to lend me $1m for neg geared resi property would I be able to borrow $1m for commercial pos geared property? or is that a really hard Q?

 

[Aaron Sice]

there's a big list you have to tick and a larger deposit.

 

[Ausprop]

in broad terms I would think so, but I am not a bank, unfortunately. deposit being the main factor

 

[jaycee]

so the under $1m market is not as reliable Ausprop ?

 

[Ausprop]

I am not an expert really. $1m is just a nice parcel size IMO. I shoud think there are ok places around the $500k mark? you could 100sqm of office or more for that possibly - and the market is depressed too so could be good buying

 

[jaycee]

bloody confusing all I can say

any thought people on resi apts round Nthbridge , beaufort st new at just under 500k apparent rental rate of 550/wk.. still negative if you borrow100% costs of course.. I worked the shortfall out using 6% interest and 9% PM fee to be about $8k pa ?

 

[Ausprop]

as far as resi goes I think they would be good. apartments will be thin on the ground once the realisation hits that very few new ones will be built

 

[jaycee]

spoken to someone else who is also selling aptments in the same building (my neighbour). Mentioned tcould get into the building cheaper, but without that much dissocunt in rent... but, they beleive I may be better off with rentable house on a triplex block in Balga, esp if I develop it myself in a few years.. not sure how many that would be...

One way I've thought about it is by borrwoing about $100k(+ ?) less to buy in Balga, I may be in a position to buy again earlier than if I borrowed more to get an apartment...

someone's going to say either is probably a better idea than doing nothing..

 

[Alex P Keaton]

Did anyone else see the article in the sunday times today. It was in the real estate section. According to Landgate quite a few suburbs in Perth have gone up over the past 12 months. eg Dianella has gone up 10% in the past 12 months.