Perth houses are currently as affordable as they were in 2003 and 1996

[HiEquity]

Personally I believe with the reduction of the WA FHB grant, combined with the ongoing lender tightening on RIP servicing etc, on top of the massive recent increases in land tax in the State Budget will mean that certain FHB / RIP suburbs will get hit pretty hard yet.

I know a lot of people leaving Perth and I don't see a lot of newcomers either - but that could just be a result of the limitations of my own network. The only trend going against this is lower IRs (not insignificant but I'm not sure it will be enough).

I've got enough at stake in this market already to watch and wait a little longer before loading up.

 

[MTR]

With respect MTR, I think Shadow's right. You are talking about mainly development sites and particular suburbs but my bog standard Perth PPOR and RIP have done nothing since 2008 - probably gone back a bit actually based on recent evidence. Plenty of non development RIP stock across Perth has been in the same boat. All the action around development sites and product hasn't really moved the rest of the market much as a whole over that time - of course certain suburbs are always exceptions but I'm referring to the whole Perth market here.

Not just developments sites, I mentioned this because that has been my focus and perhaps the sites have had exceptional growth. However I can also say that units, villas close to the city during this period achieved similar results with multiple offers, I know this because my g/friend was trying to buy and it was extremely difficult. FHB actually drove this market, during this period 30% were FHB.

Now you mentioned blue chip, yes you are correct, we have not seen any growth in this area say $1.5M + properties since late 2006, but blue chip is a small % of the market.

My point is graphs do not tell you this, there are markets within markets, and there certainly was a rising market during 2012-2014, however these were around $500K range to start off with FHB market and then we had the ripple effect and it was absolutely not just development sites. Investors on SS were also buying land in outer burbs north and making money on land and house packages. I could go on about which and where but all it came down to demand and supply and that's about it.

If anyone missed the boom during this period then must be taking drugs, or just bad luck, that's a joke

MTR

 

[HiEquity]

If anyone missed the boom during this period then must be taking drugs, or just bad luck, that's a joke

MTR

Absolutely there was a boom in particular suburbs - as I said. But there were a lot of outer and inner suburbs left out of that. Prices in Mandurah, Rockingham, prestige suburbs, Eastern and plenty of other areas where not much was or is happening have hardly moved at all since 07.

My guess is that for as many suburbs which have "boomed" there are just as many or more which haven't... if you had bough a house in Carine in 07 and were wanting to sell it now you might make back your transaction costs if you're lucky!

 

[Ausprop]

With respect MTR, I think Shadow's right. You are talking about mainly development sites and particular suburbs but my bog standard Perth PPOR and RIP have done nothing since 2008 - probably gone back a bit actually based on recent evidence. Plenty of non development RIP stock across Perth has been in the same boat. All the action around development sites and product hasn't really moved the rest of the market much as a whole over that time - of course certain suburbs are always exceptions but I'm referring to the whole Perth market here.

I would agree that very generally speaking - and outside of development sites - Perth property has done nothing since the great price collapse of the GFC. I know there are some exceptions in the inner eastern suburbs etc tho.

 

[Ausprop]

My point is graphs do not tell you this, there are markets within markets, and there certainly was a rising market during 2012-2014, however these were around $500K range to start off with FHB market and then we had the ripple effect and it was absolutely not just development sites. Investors on SS were also buying land in outer burbs north and making money on land and house packages. I could go on about which and where but all it came down to demand and supply and that's about it.

If anyone missed the boom during this period then must be taking drugs, or just bad luck, that's a joke

MTR

I completely missed it... seems I was invested everywhere except where the action was In 2009 I sold out of a lot of devy sites, what a bad move. It seemed beyond realistic in that environment of tightened lending, financial woe etc that development sites of all things would take off

I didn't realise people were making money in h&l in the north? certainly the southern ones such as seascapes and singleton you woul dbe struggling - and still are -to get your money back on them.

 

[spanna]

I was purchasing through this period and see it exactly as MRT.... Blue-chip obviously a different story though

 

[MTR]

Problem is it is difficult holding development sites, you need deep pockets.

There were a couple of posts from various members who were building way north, the suburb escapes me now, but the figures stacked up for these people.

Now we are starting to see prices of development sites fall back, nothing is making too much sense in Perth at the moment, or perhaps I am not creative enough.

MTR

 

[perthguy]

I would agree that very generally speaking - and outside of development sites - Perth property has done nothing since the great price collapse of the GFC. I know there are some exceptions in the inner eastern suburbs etc tho.

I follow a couple of sub-markets and I will take a stab at some growth suburbs without cheating and looking it up first. I would expect to see growth in Dianella, Morley, Bayswater and Embleton over that time. This ias "All houses" median house price from re.com.au *

Suburb: 2007 median - 2014 median - increase
Dianella: $577k - $677k +17%
Morley: $470k - $565k 20%
Bayswater: $485k - $650k 34%
Embleton: $440k - $580k 31%

During this time, many suburbs were staganant or went backwards. How come any suburb I wanted to buy in went up so much?

* example http://www.realestate.com.au/invest/house-in-embleton,+wa+6062

 

[2FAST4U]

I would agree that very generally speaking - and outside of development sites - Perth property has done nothing since the great price collapse of the GFC. I know there are some exceptions in the inner eastern suburbs etc tho.

That's also depsite a once in a lifetime mining boom

 

[Ausprop]

give up on those areas, just go buy in rockingham, shoalwater, singleton etc. Given HE's post. how about Carine?

or even better, push into the western suburbs, looking comparatively dirt cheap.

if you really want dianella, I guess a 17% increase over 7 years is not too much to deal with, it's less than what the holding costs on those properties would have been. Assuming the numbers are real... medians were completely useless for reflecting the reality of what happened during the GFC

 

[Ausprop]

That's also depsite a once in a lifetime mining boom

yeh that was more 2003-2006

 

[INVSTOR]

Absolutely there was a boom in particular suburbs - as I said. But there were a lot of outer and inner suburbs left out of that. Prices in Mandurah, Rockingham, prestige suburbs, Eastern and plenty of other areas where not much was or is happening have hardly moved at all since 07.

My guess is that for as many suburbs which have "boomed" there are just as many or more which haven't... if you had bough a house in Carine in 07 and were wanting to sell it now you might make back your transaction costs if you're lucky!

From my research of Carine I thought most houses worth around $700,000 a few years ago were selling for about $100,000 more.

This house was on the market about 6 months ago for about $10,000 - $20,000 more than what they paid a couple of years earlier.
http://www.auhouseprices.com/rent/view/WA/32771762/11+Taxal+Close,+Carine+WA/

My Perth properties only went up around 10%. I'm not sure what Ashfield did as my property never has comparables and my bank valuation was a joke.

 

[HiEquity]

From my research of Carine I thought most houses worth around $700,000 a few years ago were selling for about $100,000 more.

This house was on the market about 6 months ago for about $10,000 - $20,000 more than what they paid a couple of years earlier.
http://www.auhouseprices.com/rent/view/WA/32771762/11+Taxal+Close,+Carine+WA/

My Perth properties only went up around 10%. I'm not sure what Ashfield did as my property never has comparables and my bank valuation was a joke.

That's pretty much my thinking - nothing much left over after transaction costs...

 

[Deltaberry]

It's possible that as Sydney and Melbourne house prices move out of reach for more and more people, investors and homebuyers will begin to look interstate.

Yes but don't Melb and Perth have similar prices now? Until what you say happens shouldn't Melb run first? In fact I thought Melb had siimilar house prices as Perth as at end of Q1 2015.

Why wouldn't money go to Brisbane first which is still hovering around $500k median?

 

[MTR]

Delta
Melb median $669k as this market is booming I would not be surprised if it hits 700k at the end of this year?

While Perth median is currently 550k and falling, so would not be surprised if median of Perth falls below 550k.

I think investors are actually buying interstate, where they see value, and where they believe there will be growth?

It's a tough gig trying to purchase in Syd/Melb it's just nuts.





Mtr

 

[Ausprop]

I dread to think what a median house in Sydney even is

 

[Shadow]

Beg to differ, I live in Perth.

I know my properties in Perth during this period on average rose 30%+

It may be the case that your properties aren't representative of the entire Perth market.

The figures I'm quoting are the official ABS figures for the whole of Perth - i.e. the average for the whole city.

But congratulations on beating the wider market - as investors that's what we should be aiming for!

 

[Tano]

Shadow, what indicators should be looking out for (in particular) so we can catch the trend with the smart institutional investors (whenever it happens)?

 

[Deltaberry]

Delta
Melb median $669k as this market is booming I would not be surprised if it hits 700k at the end of this year?

While Perth median is currently 550k and falling, so would not be surprised if median of Perth falls below 550k.

I think investors are actually buying interstate, where they see value, and where they believe there will be growth?

It's a tough gig trying to purchase in Syd/Melb it's just nuts.





Mtr

I always thought Perth median was around 640?

 

[Norwester]

Hi Shadow,

2.5% for Perth vs 1.8% for Sydney

As a plain stat for 2013/2014 yep......but the population growth for Q4 2014 was -75.....(nett loss)

Haven't seen any info for Q1 2015 as yet but would be surprised if it's in the plus range.........

Unfortunately people can't live where there is no work to support them............although it has taken a bit of time for them to wake up to that, still a lot of people over here living in dreamland........

Does bode well for future purchases though....


Ciao

Nor