I think the hurd are starting to buy in Perth - Peaking ?

I think the herd are starting to buy in Perth - Peaking ?

Did anyone see the article in WA's Sunday times today? Page 8 of the liftout

I attached the article.

44 % of the 1000 surveyed are thinking of buying in Perth 2014.

I know just the 1000 surveyed is not a large sample to go on but I have a feeling Perth is nearing the peak of the market and it appears according to this article the hurd are gaining momentum.

You need to get in before the herd. The herd are always too late, pay top dollar and buy at the peak of the market. I think the time to buy in Perth was 1 - 2 years ago!

The article also talks about Perth's yields and that there is a chance the rents will go down even more as there is more stock than there are people looking to rent. Vacancy rate is now 3.8 % a jump from 3.2 %

Industry experts thinks Perth values will rise by the end of the year and rents will drop back making renting more attractive than buying.

What do you think? Is Perth at the peak of the market? Nearing the peak?

I'm hoping people will see this article and the public will want to jump on the bandwagon pushing up values even more!

Yep... not the time to invest in Perth!
 

Attachments

  • Owners warm to investment.jpg
    Owners warm to investment.jpg
    100.4 KB · Views: 95
  • WA's Sunday times March 2 2014.jpg
    WA's Sunday times March 2 2014.jpg
    101.4 KB · Views: 108
There has been a sustained climb for sometime now, whilst supply has increased and vacancy rates putting a hold on rents. I would hypothesize that any growth from this point would not be stable, with just as much likely a pullback from any gains in the next 6 months.
 
So when a market reaches a peak, what happens, do some areas stall and then fall back, followed by more desirable areas following suit? Or does everything stall and stay stalled, or stall and fall back all at once?

Typically how long does a market stay flat after it's reached the peak? or is that a question like *how long is a piece of string*?
 
Articles like that usually help the market with increasing consumer confidence - ie let's go get an IP as it's at its most affordable

When confidence is high the market keeps climbing. When it's low and we see lots of articles about mass redundancies, company shutdowns, mortgage defaults then the housing market tends to follow suit.

I feel market sentiment is still good so I still see growth this year.

Tula: it can either plateau, correct (when the market feels it got too hot and dips back somewhat) or drop when confidence is low or financial markets tank. In 2008 many areas in the metro Perth dropped 25%, outside as much as 40% (mandurah, down south holiday homes etc)
 
Thanks WM, what happened in 2008? In 2007 we bought our PPoR and I had to pay $10K over asking price to secure it. That was at the time when you'd see people camping out to get a H and L package. So I assume that was the peak, and then 2008 was that a correction?
 
Thanks WM, what happened in 2008? In 2007 we bought our PPoR and I had to pay $10K over asking price to secure it. That was at the time when you'd see people camping out to get a H and L package. So I assume that was the peak, and then 2008 was that a correction?

MTR knows the dates/years for sure but it was the 2008 GFC that caused the crash. In some markets 2007 was already in correction, the boom went up to around 2006. I know that my Westminster property was originally marketed at $540k (boom prices) and I bought it for $450k in 2007
 
MTR knows the dates/years for sure but it was the 2008 GFC that caused the crash. In some markets 2007 was already in correction, the boom went up to around 2006. I know that my Westminster property was originally marketed at $540k (boom prices) and I bought it for $450k in 2007

I remember I bought Clarkson for $197k in 2004 and sold for $370k in 2008 and i watched online for a couple of years afterwards (regretful sale) and similar places were still $370k right up to about 2011.
 
So when a market reaches a peak, what happens, do some areas stall and then fall back, followed by more desirable areas following suit? Or does everything stall and stay stalled, or stall and fall back all at once?

Typically how long does a market stay flat after it's reached the peak? or is that a question like *how long is a piece of string*?

Depends on what triggers the slow down. In many places in Sydney the market peaked in 2003 , but then it went sideways for several years. Our PPOR which we finished in around 2005 has only just gone above our post completion valuation around six months ago , but based on sales we've seen in the last couple of weeks , it's probably gone up 20 % in those last 6 months and so far we're not seeing signs of the market cooling down . On the contrary , the more expensive properties are now moving and selling for good prices

The GFC triggered a sharp fall for those who had to sell . The recession we had to have also caused a sharp fall back in sydney.

Prices only fall sharply ( in big markets ) when enough people have to sell and enough buyers stop buying . In 1993 I saw a house sell in the 600's when it had previously sold in late 80's for over a mill. Probably around 4 mil in todays market.

As I've said on many occasions , we picked up two units in Mosman for 900 just after the GFC hit . Initial asking price 1.275 .

If things just get too expensive , people stop paying the optomistic asking price, rather than come crashing back down .

IMHO for a serious correction in property prices , you need a serious correction in the economy , globally or local .

Cliff
 
Okay, interesting. So this GFC thing, it happened and didn't affect us in any way, hubby's superannuation faltered a bit, but then grew at 12% the whole way through. My dad's super dropped $150K in a very short time and he pulled it all out (think he's hiding it in a sock somewhere).

My business went gangbusters; awesome income - so we were sitting here wondering why everyone was complaining. i guess we were in the middle of renos we could afford, having babies (one in 2010 one in 2012) and just blocked out the rest of the world.

Seems the GFC passed us by - however, we didn't get the $900 everyone else got in the stimulous package.
 
It becomes a higher risk proposition now as Perth started rising 2 years ago. It now comes down to working out what areas are still moving, some have peaked but not all. I still see legs in the areas I am targeting.

As a developer its just a numbers game, I am currently looking at another site in Perth but have to pay more $, if the end value (villas) has increased substantially then it may be a goer. The only issue there is if the market tanks properties can fall back. How to reduce the risk? make sure the rents cover the mortgage, LVR no more than 80% and look at areas which are still moving ie perhaps its catch up time for a particular area, infrastructure improvements driving it up, increasing demand etc.

Negative media reports influence the market, at the moment in the main its still positive, but we just don't know whether this will continue. I think the big one will be when interest rates start to rise.

I never stop buying and selling, its just a matter of watching markets very closely and don't put everything in the same basket, as not everything is equal.

Also, during GFC doom/gloom time, Melbourne property market was booming, not all markets were effected. I have no idea why this happened, but Melb was the flavour of the month during this period.

Cheers
MTR:)
 
API just did a spread on Butler this month...sign of things to come...I still there is another year of growth...in select areas of Perth.
 
i suppose you could take the median price from the last peak and double it and that is likely to be the high point of this cycle
 
That would mean Perth median would reach around $800,000, I can't see this happening any time soon, median is currently $546,000.

According to this link, median house price in Perth doubled from 2001-2005, market peaked in late 2006. Its pretty rare to have a boom last this long, I think the norm is 18 months -3 years.

http://www.westrealestate.com.au/pdf/House_prices_2012.pdf

probably around 5 or so years growth at the commonly held view of 7%

$546,000
$584,220 1
$625,115 2
$668,873 3
$715,695 4
$765,793 5
$819,399 6
 
Top