Mandurah and its problems

as in, Mandurah demographics? i was just doubting the ability of the current population to swallow further rent rises .... not that that will stop rents rising, if they don't like it, they can move next door, who's charging the same.

mandurah is a little landlocked - there's a thin stretch of land it sits on and anyone who says "i live in mandurah" when in fact they live in Falcon is kidding themselves.

rather than hijack another thread I have started this.

I have a few units down there and have to admit to laying awake at night wondering if there is a future for them. after the boom they dropped back 25% and the market is as slow as. rents havent moved for ages. these are in central mandurah and in the area being rezoned R60. i am not sure if I am being impatient tho and I just need to wait
mandurah will have it's day - it's just a case of "when", not "if".

for me - and my drive down to Busselton - the bypass is the best thing ever.

However, i think it'll be a sh*t thing for Mandurah in the short term but a big bonus in the long term because planning around a major highway is just plain stupid. Falcon will connect with Mandurah better along with Erskine etc but i think Mandurah could really do with a local light rail - it's car city down there.

R60 is a good thing - just don't be a pioneer. Wait and see what other investors are doing and follow suit.
We bought IPs on the Gold Coast in 1990 and 1991.

Prices did not move at all for about 5 years. Rents were stagnant and we considered ourselves lucky to have no vacancies.

Had we sold at any time within the first 7-8 years we would have been lucky to break even.

Then in the early 2000s prices skyrocketed and practically doubled overnight.

This is the way it is with real estate. Yes, prices may double over 7-10 years but the increases will not be steady. In our case it was a matter of no growth for 7 years then spectacular growth over the next 3 years.

What to do?

Figure out exactly how much it is costing you each year to hold the properties. In our case I worked out that after non-cash deductions and the reduction in our tax it was costing us about $200 a year (well, this WAS 1994 or 1995) to hold each property.

The reality of rentals is that rents do not always rise as regularly and reliably as they have over the last 4-5 years. You may find they stagnate for 3-4 years.

In our time of holding IPs (around 25 years) we have lived through the booms and the busts.

In the slow times, we have seen new tenants offered:
cash towards moving costs
first two weeks rent free
reduced rents just to get a tenant.

Personally I think we are entering a slowing rental cycle. Yes, there are shortages but we also know of many people who are choosing not to rent by moving back with parents, sharing with others already renting by moving into a spare room, or simply not moving out of home. Rents can never exceed what people can afford to pay.

If purchasing prices are down 25% then the truly adventurous are probably out buying more!!
I think Mandurah will take a few more years to settle down yet. it grew far too quickly for its own good.
Now that the new freeway is operating its a godsend for those who live here. The traffic was terrible. Still is if you go into Mandurah central.
Parking is very bad as there is a little scatter of shops all over the place.

The Forum needs a bulldozer through it. Its a hang out for far too many undesirables. Little boutique shops dont seem to last too long here. All the shops at the Marina take a huge hit in turnover through the winter months.There is just not enough people here to have a constant trade.

Services have improved quite dramatically over the past 3 years.
I do believe all services/ infrastructure in Mandurah is planned and designed for the retiree first and foremost.
Rents are cheap here. Unfortunatley l cant see that moving too much in the next 2/3 years.
The Poms love this area. Sooo many of them here.

It is a great area to live with all the water and bushland. Good for the soul.
Very expensive to eat out here, especially if you have come from Melb:eek:

There is a very obvious divide growing here between the haves and have nots. The have,s sure dont mind putting the have nots in their place either.

The term "l live in Mandurah" is very broad and l think will change in time. It needs too.

I know quite a few people who have moved to Mandurah into a unit/townhouse and have regretted it. They still wanted a bit of dirt to scratch in and a bit more privacy than what a unit has. They sell out of their unit and buy back into the house and land market.

Lets face it there really isnt any need for high density housing here.

Ausprop only you can decide if you hang onto your units in town. By the way do you think they have clawed back the 25% in value yet?

I really think margs post is good read with plenty of food for thought.
I best get off my ramble box
Hi yadreamin

Good read.

I sold one of my properties in Mandurah and it was an easy decision, low rent, growth going backwards.

I am happy I did as I was able to use this money to help purchase over East for better yields and growth.

Cheers, MTR
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How long is "ages". Didn't the boom only end 2 years ago? My rents have gone down since then and haven't improved either. I wouldn't let that bother you, it's all part of the excitement right?

As for mandurah, it's never going to be the West coast version of the Gold Coast. But it was on the fastest growing towns list for a while there. condsidering the recent reports of our ageing population, it could continue to grow as retirees get out of Perth. I don't know why you would retire in mandurah but some people seem to like it.

Anyway, given the expense of selling and rebuying its a tough call, if you could do it cheaply I would always prefer to own in a capital city than a country town.
I am happy I did as I was able to use this money to help purchase over East for better yields and growth.

my concern is that it is only sentiment and inefficient planning driving the east coast. this country is all about resources... on the current trajectory it will be the 2 speed economies of WA/Qld vs the rest, however I am starting to worry about this countries vulnerability to resources demand shocks and have to wonder if we are all dangerously exposed
Hi Aus

I like to spread my eggs around, its working for me.

Resources - that is not the only factor I look at.

If you believe this then you will most certainly miss the boat. It is much more than market sentiment driving East Coast. All the hype of housing shortage in Perth is nothing compared to Syd, I dont have figures on me, sure you can find them somewhere.

Melb market has been moving since 2007, dropped back in late 2008 I think, there abouts and then boomed in 2009. I have continued to purchase since 2007 and have used this equity to keep going. Now I am into the Syd market, nothing like following a rising market.

I stopped investing in Perth market in 2006 just after the boom. Everything in Melb appeared to be a bargain compared to prices in Perth. Melb and Syd are playing catch up now.

Cheers, MTR
Melb and Syd are playing catch up now.

careful you will be shot down on this forum for suggesting the resource states lead the way. apparantly Syd decides to have a boom (must be from all the japanese tourists) then that ripples out to the rest of the country :rolleyes:

would have thought it way too late to be getting on the east coast band wagon? especially as our economic miracle is sitting on a knife edge.
Hi Ausprop

I must have touched a raw nerve, not intended.

Just sharing my views and am sure many will disagree with me, wont be the first time.

Cheers, MTR
For those of us here in the west you can read all about the new prediction of a mini boom about to hit Mandurah:rolleyes: in todays West.

I really do think " Fly in Fly out " is just a new frase everyone likes to throw around.
Far to much emphasis is placed on what and where these workers are going to spend their so called " massive" wages on. So many are just average joes who go home at the end of the work day and pay the bills and put a bit away for a rainy day.
A hell of a lot of these workers are also from NZ and thats where their money goes as they comute each shift.

Ok bring on the mini boom