How Will the Perth Property Market Next Develops?

[Kennethkohsg]

Dear All,

1. According to Herron Todd White Valuers' research, the Perth property market is presently some where between the rising market-peak of market situation, approximately 9-10 o'clock, with shortage of property on sale to meet current market demand. This is despite the last few years of continuing strong market growth.

2. Do you agree? Why?

3. It is further believed that the Perth property market is expected to reach its peak in about 2 years time.


4. After that, no one can say for sure whether the market will proceed to a declining market situation as per its past property cycle trend or continue to grow further for some time more as a result of its recent continuing resource boom, increasing employment levels and inter-state immigration levels and population increase.

5. What do members thinks and say about this?

6. Looking forward to a healthy forum discussion and exchange of views and mutual learning for each other's knowledge and experiences, please.

7. Thank you.

regards,
Kenneth KOH

 

[kph]

Kenneth,
The HTW report concentrates mainly on Qld NSW and VIC with Tas, NT and WA being included as an afterthought.

I would think your own due dill and the reports you get from Hegney would more accurately reflect the state of the WA market.

As you well know, it is easy atm to buy a block in a new land release, organise a house to be built on it, and by the time you get your title and construction starts you're already up quite a few thou' on the land value, and by the time construction is completed you may be up $70k or more.

This is a rare phenomenon and clearly not sustainable indefinitely.
When the supply finally catches up with the demand ( or the demand wanes) this will end.
Maybe prices will retreat a little.

As far as their clock goes....if we are at 9 or 10 o'clock and the theoretical peak is at 12 o'clock, how long between 9 o'clock and 12 o'clock ??

According to my watch, thats only 3 hours to go ...


kp

 

[Kennethkohsg]

Kenneth,

As far as their clock goes....if we are at 9 or 10 o'clock and the theoretical peak is at 12 o'clock, how long between 9 o'clock and 12 o'clock ??

According to my watch, thats only 3 hours to go ...

kp

+++++++++++++++++++++++++++++++++++++++
Dear Kph,

1. Interestingly enough for me, my own gut feel was 2 years more kin dof time-frame to reach the market peak in the Perth Property market from 2005, from its 9-10 o-clock position.

2. For me, it is the same 2 years time frame to reach the market peak from 9-10 o'clock property market postion, whether be it in the Perth Metroplolitan Region or as per the Cairns regional property market in Queensland when it was last reported to be 9-10 o-clock in July 2003 and just reached its market peak towards the end of 2005.

3. I wonder what are the other members' experiences like?

4. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Kenneth,
The HTW report concentrates mainly on Qld NSW and VIC with Tas, NT and WA being included as an afterthought.

I would think your own due dill and the reports you get from Hegney would more accurately reflect the state of the WA market.

kp

***************************************************8
Dear KPH,

1. What does Hegney reports says about the present Perth property market situation then?

2. Are you actually referring to the Hegney's Property Valuation Newsletters or/and its periodic media release or its weekly sale data release in "The Australian" Weekend Newspapers Editions or some other specific reports?

3. Do you also read up from the other WA-based valuers report such as the Egan National Valuers' Newsletters, DTZ-Perth Newsletters etc?

4. How do you find the quality and accuracy of the REIWA's news, in describing the Perth property market?

5. To me, I find the HTW Valuers' market commentary to be on the conservative side and more reliable though not neccessarily more accurate though.

6. Yes, beside sifting through the various market commentaries by the different property valuers, REIWA and research groups market reports, I do piece my own independant opinion regarding a particular market situation and compare it with my own ground observations and data collected from the variousd subsurbs and RE agencies, monthly issue of the API magazine etc as well as from the members' feedback in this and other property forum discussions.

7. Thus, I do consider myself to be quite well-read and well-informed about the market situation to a certain extent. Despite this, I still continue to learn continually from new data sources, members and my own property investing experiences.

8. Looking forward to hearing your ( as well as the other members) views and feedback for my own self-education purposes, please.

9. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

Kenneth,

As you well know, it is easy atm to buy a block in a new land release, organise a house to be built on it, and by the time you get your title and construction starts you're already up quite a few thou' on the land value, and by the time construction is completed you may be up $70k or more.

This is a rare phenomenon and clearly not sustainable indefinitely.
When the supply finally catches up with the demand ( or the demand wanes) this will end.
Maybe prices will retreat a little.

kp

*****************************************************
Dear Kph,

1. Your comment on the current market development as "rare" phenmenon is interesting. What do you mean exactly?

2. You also seem to be of the view that the current market growth is non-sustainable. Why? Do you see the current development as typical of its past property cycle trend in the Perth property market?

3. When do you personally reckon the supply will catch up with demand within the Perth property market situation?

4. The present shortage of supply of properties on sale seems similar to the June 2003 market situation, if not, even more acute recently, according to REIWA. So can we then say that the June 2003 shortage of properties on sale has led to the current boom, the present market shortage of property on sale in the Perth property market will also likely lead to a further boom into the 2007 time frame too? Do you agree? Why?

5. What and how do you see the Perth property market will eventually evolve out, after post 2008? Is it still viable to continue investing in the Perth property market then or more viable for us to consider re-deploying our funds to invest in other markets like the Melbourne property market etc?

6. Looking forward to hearing your ( and the other members') views and learning from you soon.

7. Thank you.

regards,
Kenneth KOH

 

[Ausprop]

with builders shutting their display homes and homes still taking years to build i.e. supply side low, and demand rapidly increasing, it is hard to see how the two can find common ground. Council approvals aren't getting easier either, I often hear developers saying they have had enough and the headaches just aren't worth the reward. then there is the new environmental standard that kicks in next year.

I can see the crisis worsening and eventually the govt may be forced to take control of the approval process as it is just not workable at present. they can sit around and blame investors and first home owners grants all day long, but EOD the only way to satisfy growing demand is through supply. This will require a stream lined approvals process along with (some how) a supply of trades to build the homes.

the removal of the Perry Lakes Stadium from Cambridge Council back to state govt level is a very interesting development and IMO a sign of things to come

 

[redwing]

Ausprop,

I believe in Broome the local council and builders have come to an agreement of sorts and approval can now be fast tracked if you follow the correct process (such as using 'approved' engineers, architects and the such)..

Maybe other councils need to reveiw the process??

There was also a huge problem with builders buying up the land as it was released and building *spec* homes, knowing full well that they could sell them quiet easily as they progressed(easy money and land is limited in the town site) meaning many other missed out.

REDWING

 

[Kennethkohsg]

Ausprop,

There was also a huge problem with builders buying up the land as it was released and building *spec* homes, knowing full well that they could sell them quiet easily as they progressed(easy money and land is limited in the town site) meaning many other missed out.

REDWING

**********************************************
Dear Redwing, Ausprop and other fellow forumites,,

1. I agree with your observations though I have also sort of noted that builders are less "hot" in such ventures recently.

2. However, this is not "real demand" which artificially "inflate" the present housing shortage problem and result in further NON-sustainable price increases which will need to be corrected in time to come.

3. Thus, with such market distortion of the real housing market demand (and eventually also "artificial" market pricing in the absence of support from real market fundmental factors), new investors will need to be cautious about/when reading/interpreting the real market demand vis-a-vis the market supply of housing units in the Perth property market.

4. For your kind update, please.

5. Thank you.

regards,
Kenneth KOH

 

[Ausprop]

yes but there is nothing artificial about the demand here in Perth... if only I had a $ for every enquiry we got from the UK or people moving from other parts of the world and australia regarding rentals and house sales! My point was just a simple demand/supply analysis - limited supply of properties, rising demand for properties. Hegneys made the point about 6 months ago, that it will be physically impossible to build an adequate supply of housing. perhaps in a few years the commodities boom may ease, the back log of home building may clear up, the building approvals process may be stream lined. until then, sleep well at night!

 

[Kennethkohsg]

Dear Ausprop,

1. I agree with you.

2. I am optmistic about the Perth property market for the next 2 years. My concern is how it will fare after 2008 and beyond, as this thread is aimed at addressing.

3. Sweet dreams, please.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

************************************************8
Dear Ausprop,

Can you please provide me a copy of this report by Hegney, please.
Thank you.

Cheers,
Kenneth KOH

 

[tropic]

Can I have a copy too please...

 

[Ausprop]

sorry guys - the 'report' was a radio interview, though I have stumbled across recordings of these interviews before on the ABC website.