How "hot" is the Perth RE market now?

[Pete]

I'd be interested to hear comments from others.

In the last week I've talked to a few people who have been looking to purchase houses for sale. Repeatedly the message is that houses are selling at virtually full asking price at the first home open.

Is this the experience others are encountering?

It surprises me a little and I suspect it is only in very few locations.

So, how "hot" is the Perth RE market now? What are your experiences?

 

[paulie]

It's pretty hot, certainly hotter than luke warm but probably a little bit under scalding hot.

Paulie

 

[Ausprop]

I agree - we are certainly working hard to secure stock for our investors. I think the delays in building along with an almost superstitious fear of developing inner-city have reduced supply at a time when demand is rising. I can't see this changing in the medium term.

 

[madmurf]

Hi All

The Southwest is Hot.
I settle today on a beachside block which has risen 40 percent within the last 3 months. I was hoping for this within 12 months.
The reason I know it’s risen this amount is because the blocks next door to mine have just been released by the developer at this price.
I cant see anything but light at the end of the tunnel over the next few years.
The only issue is getting a house built takes over twelve months.

Cheers

 

[yadreamin]

I actually noticed within a month of the last interest rise and the media doing their "bit" on doom and gloom that there were more RE adds with price reduced or motivated vendor typed across them.

2 weeks ago l picked up the Peel news and was really surprised at how many had reduced price.
I know that there were some that were very over priced to start with.
Maybe a little bit of panic from the vendor is starting to show .

On the other hand 2 couples went to the new marina development in Mandurah and convinced the developer to pre release 2 blocks to them 575k & 535k these blocks were still a blank on the plans.I asked both couples why they had rushed and payed soooo much. both answered
"we didn,t want to miss the boat" we will never loose money in that area!

so are we getting panic buying and panic selling.
What part of the cycle do ya call that?
Cheers yadreamin

 

[the.j]

"we didn,t want to miss the boat" we will never loose money in that area!

so are we getting panic buying and panic selling.
What part of the cycle do ya call that?
Cheers yadreamin

Irrational Exhuberance?

J

 

[Aceyducey]

Perth is the new SE QLD.....

But only for a short period of time I wager

Cheers,

Aceyducey

 

[ralph wiggum]

Acey
I thought it was the new New Zealand?

 

[JP1746]

WOW !

40% increases in 3 mths ?
Full price contracts being knocked back by vendors ?
Properties selling same day as listing ?

Then it must really be different this time - a new market phenomenum - a new paradigm !

GUYS, this market is never going down !!!
Absolutely no chance of a decline here !!!
I'm on the next plane over ! Just put a half dozen contracts in front of me, and she'll be apples !!!

JamesP

 

[Ausprop]

Yadreamin - where is the block if I may ask? I was looking at blocks at Dunsborough Lakes last Easter for $100k and ummed and arghed and missed the boat, I see the latest releases are from $189k... kicking myself.

 

[yadreamin]

Ausprop
The blocks are near the new Mandurah Marina.Over the foot bridge near/behind the old Pinisular pub site.But l think it,s still called the Marina area.
Cheers yadreamin.

 

[madmurf]

Acey and Co
From Mandurah down its a boom area at the moment.
How long for. Not long you say. Prepare to back up your comment.?
Let me see its all based on interest rates. Not quite.
Its a completely different market to the eastern states.

I was on the WA wave 12 years ago and bought a house for 36K and sold it
for 86K 3 years later. ( No wasted weekends in renovations either).

The resource sector is the force behind this one. If the worlds hunger falls in a heap then the market will follow.
IMHO the way I see it is we have at least 3 to 5 years of growth. Time will tell.
In that time I intend to buy blocks and keep building and re-assess every three years.

Hopefully in 3 years you guys our out of your slump and I can start looking over there.

Cheers

Madmurf

 

[Aceyducey]

Madmurf,

If it's resource driven then I'd be happy to back your 5 year run

Unfortunately I don't see it as resource backed if it's being driven by east coast investors looking for places to put their money where they get a better gain in the short-term than Sydney or Melbourne.

Time will tell.

Cheers,

Aceyducey

 

[Ausprop]

yes unfortunately the infrastructure in WA is struggling to cope. the new train will help open up the corridor to Mandurah tho. The inequities of resource revenue distribution in this country puts a huge state like WA at a major disadvantage... hence why WA stamp duties are so bad. the freeway extension to bunbury and the new coastal road north will open the area up to Jurien Bay and take some pressure off the south west corner. delays in materials and labour combined with strong migration rates are seeing are a very tight rental market and a shortage of new property on the market. builders order books are so back logged that i can't see any relief from these numerous pressures and i would think a good 5 year time frame of growth is not unrealistic. With the strongest state economy, cheapest housing, strong migration rates = unsustainability of low prices. it will never have the median price of Sydney but, lets face it. as the median price rises i would expect eastern states interest to naturally wane as they compare like for like value. I see it as contributing to a healthy market.

 

[Kennethkohsg]

Dear All,

I fully agree with Austprop' a/m views.


Cheers
Kenneth KOH

 

[D.T.]

Heya,

Sounds logical to me, Ausprop

 

[madmurf]

Investers

Madmurf,

If it's resource driven then I'd be happy to back your 5 year run

Unfortunately I don't see it as resource backed if it's being driven by east coast investors looking for places to put their money where they get a better gain in the short-term than Sydney or Melbourne.

Time will tell.

Cheers,

Aceyducey

Acey

Just noted in the latest API that investment lending in WA has only gone up 0.5 percent compared to:

Tas 2.9
Queensland 2.4
Vic 1.7
NT 1.5
SA 0.5

And gone down in:
ACT 22
NSW 4.2

Interesting about the ACT.

Also have a read of the Hegney Property Group Report.
The report states the Southwest of WA was tipped to out perform the Perth metro.

Cheers

MM

 

[Pete]

REIWA message

from REIWA 31 March 2005. (At time of posting, article is found under News Flash. I haven't posted the link directly to the article as it will soon be out of date.)

Bright start to 2005 for Perth real estate

Sellers continue to dominate Perth's residential real estate market, according to the latest monthly sales results from REIWA.COM.

The ratio of sales to new supplies of properties for sale in Perth's established housing market was 78% in February 2005. This represents an increase of two percentage points on the ratio in January. The ten year average sales to new listings ratio in Perth is 55%.

REIWA.COM processed 2,400 residential property sales in Perth during February.

REIWA President Greg Rossen said the sales to new listings ratio has consistently been above 70% since 2002. "This is an indicator of continuing high levels of confidence in Perth's real estate market."

"Affordable properties are selling quickly and this is contributing to shortages in stocks of properties for sale, particularly in the investment and first home buyer markets."

"The average selling time for residential properties in February 2005 was 48 days, which is three days fewer than January."

"The REIWA.COM results are also a good indicator of likely price movements. The high sales to listings ratio and the continuing shortages of properties in the affordable markets suggest that Perth median house price will continue to rise in the March quarter of 2005."

"The continuing buoyant real estate market in WA is defying a national slowdown and it is indicative of the robust State economy."

"The REIWA.COM results were also taken before the rise in interest rates in March, however more recent information suggests that the rate rise did not significantly dampen housing activity", said Mr Rossen.

REIWA will release the March quarter 2005 median house price results in late April 2005.

 

[Glenn]

Hi Pete,

We had the opportunity to make an offer on a property before it went to full market a couple of weeks ago.

The house in question is a 4 x 1 in Mt Lawley in one of "The Avenues", over 600sqm duplex block. The block could be sub divided without having to demolish the existing house, which is very liveable (modern kitchen & bath, ducted air con)

A previous offer had fallen over due to finance @ $565,000. The agent advised that a cash offer of around $560,000 would probably get the deal for us. In my wisdom, I decided to be a penny pincher and offerred $555,000 cash. The vendor rejected the offer, went to full market sale and has accepted an offer of over $600,000 in less than a week....we live and learn.

Yes, the market is hot!

I have learnt from this....if you see a quality property at land value, don't bother trying to penny pinch, give them what they want.

Glenn

 

[Pete]

Thanks for sharing that Glenn.

It isn't always so easy in such a situation to know what to do, at the time.

I haven't had exactly the same thing; or maybe if the situation occured I have just paid the price and am not really aware of it...

A friend was looking at buying down Mandurah way a couple of months ago. After twice within a week or two missing out on houses that sold for full price - on the first home open day - they offered virtually full price when the next house came onto the market. On the first day. Vendor accepted straightaway. The agent claimed, and I have no reason to doubt it, that two other interested purchasers on the same day indicated that they would have paid full price.

As you say, we live and learn. We can be wiser next time.