perth market dead

[cyborg]

hiya

having done a lot of browsing on this forum i signed up for my first post

many are writing how perth property market is strong with new buildings getting sold in days and OTP sales as well i believe the market in perth is dead and it is only select a few properties getting sold .

have been following some properties just for the sake of it to see if they are really moving or not here are some of the property links that are not selling, if the market is crush hot why are these properties like ghost towns no rent or sale?

thoughts would be nice!

http://www.realestate.com.au/property-house-wa-morley-113194191?listingType=buy

http://www.realestate.com.au/property-duplex+semi+detached-wa-morley-112969347

http://www.realestate.com.au/property-duplex+semi+detached-wa-morley-112923103 <-- one for developers?

http://www.realestate.com.au/property-house-wa-morley-112903903

http://www.realestate.com.au/property-house-wa-morley-112553131

http://www.realestate.com.au/property-villa-wa-morley-112311003

http://www.realestate.com.au/property-villa-wa-morley-112310939
http://www.realestate.com.au/property-villa-wa-morley-112310855


all this just in one area if you have a look at last 3 properties all 3 villas look like they are a ghost town

what is happening in perth have i missed something?

 

[Of The Vultures]

I'm not sure you can judge the entire Perth market by the sale of new villas in one suburb.

 

[HotRod]

all this just in one area if you have a look at last 3 properties all 3 villas look like they are a ghost town

what is happening in perth have i missed something?

I'm sure if you look harder you'll come up with the complete opposite in another area.

There are always markets within markets.

This might suggest that these properties are over priced or maybe there's a lot of supply, hence not selling....in Morley that is.

 

[cyborg]

I'm sure if you look harder you'll come up with the complete opposite in another area.

hardly right

 

[MTR]

hiya

having done a lot of browsing on this forum i signed up for my first post

many are writing how perth property market is strong with new buildings getting sold in days and OTP sales as well i believe the market in perth is dead and it is only select a few properties getting sold .

have been following some properties just for the sake of it to see if they are really moving or not here are some of the property links that are not selling, if the market is crush hot why are these properties like ghost towns no rent or sale?

thoughts would be nice!

http://www.realestate.com.au/property-house-wa-morley-113194191?listingType=buy

http://www.realestate.com.au/property-duplex+semi+detached-wa-morley-112969347

http://www.realestate.com.au/property-duplex+semi+detached-wa-morley-112923103 <-- one for developers?

http://www.realestate.com.au/property-house-wa-morley-112903903

http://www.realestate.com.au/property-house-wa-morley-112553131

http://www.realestate.com.au/property-villa-wa-morley-112311003

http://www.realestate.com.au/property-villa-wa-morley-112310939
http://www.realestate.com.au/property-villa-wa-morley-112310855


all this just in one area if you have a look at last 3 properties all 3 villas look like they are a ghost town

what is happening in perth have i missed something?

There is always a story behind everything, the development site above, is well overpriced and not a simple retain and build at rear. Hence, will stay on the market until the seller gets real.

This area is very hot but it really depends on what you are buying and where.

Villas are not racing out the door at the moment, in my opinion there is possibly an oversupply and this is really FHB territory, my guess is that at these prices they probably prefer to buy in Dianella.

I have been buying in the Perth market since July 2012 and where and what I am buying is going up in value and am now hitting the wall, having major difficulties securing property, but then again I am not buying villas.

CHeers MTR

 

[sanj]

On a more serious note, as MTR has mentioned some of those properties are grossly overpriced.The market has in fact increased but those sellers are asking for way too much imo.

 

[Tano]

im looking to buy in balga and subdivide. These large blocks are now selling for 400k+ where as they were 350k 6 months ago. Some markets are definitely moving up.

 

[MTR]

im looking to buy in balga and subdivide. These large blocks are now selling for 400k+ where as they were 350k 6 months ago. Some markets are definitely moving up.

Thats right and if you want to secure one of these you will need to be offering cash to beat your competition.

As the prices have risen so much in Balga I do not believe the figures for developing 3 units stack up, be lucky to make 10%, unless you are a builder. Also, beware that zoning will be changing, Council has this on the agenda, too much infill.

Cheers, MTR

 

[one world]

The hard thing for people to understand is that trees do not grow into the sky. The median price of houses in Perth, currently around $560,000, it is highly unlikely to double in the next decade, even after accounting for rises in peoples incomes due to the so-called mining boom.

I do not mean to bash Perth or Darwin, I like these places. But, unless one is buying the cheaper end of these markets, the scope for capital gain is very, very limited. Coming from the USA, I've seen resource based cities similar to Perth boom and then decline/stagnate for 10-15 years in inflation-adjusted terms.

Of course, Perth will never die totally! If you like the place buy a house there and live in it. Just don't expect it to rise greatly in price unless you are buying the cheapest quintile of the market, preferably something on a development sized block.

Speaking in general terms, there is definitely better value elsewhere.

 

[John_]

Perth market ain't dead but a lot of people here exaggerate, making 50% profits 40% profits some actually think they are the next harry triguboff.

I forgot to add a link for this thread just because it is over priced doesn't mean it won't be sold here is a perfect example of an over priced junk 50sqm 2bed/1bath $10k 1/sqm all are sold before completion.

http://www.realestate.com.au/property-apartment-wa-mount+lawley-113148563

 

[one world]

Perth market ain't dead but a lot of people here exaggerate, making 50% profits 40% profits some actually think they are the next harry triguboff.

There is definitely activity in the Perth market. Demand is starting to outstrip supply.

But my heart goes out to those who will borrow to buy overpriced properties that will only stagnate in inflation-adjusted terms over the next decade.

 

[MTR]

one world
I am not sure what your logic/concern is unfortunately no one can predict what will happen in the future.

We are seeing a rising market in Perth which commenced about 9 months ago, so from what I can see on the ground it is a good time to buy. Prior to this the Perth market had fallen back started late 2006 -mid 2012, that is sure a long time between drinks


John
I have mentioned 20% profit on my purchases over the last 6 months, 40% would be better

 

[John_]

one world
I am not sure what your logic/concern is unfortunately no one can predict what will happen in the future.

We are seeing a rising market in Perth which commenced about 9 months ago, so from what I can see on the ground it is a good time to buy. Prior to this the Perth market had fallen back started late 2006 -mid 2012, that is sure a long time between drinks


John
I have mentioned 20% profit on my purchases over the last 6 months, 40% would be better

MTR i hope you make 50% your one of the genuine people here unlike some think 40%-50%

My property hunting has began with a buyers agent for a 2m project.

target 20% + 3% contingency REAL expectations.

 

[one world]

Prior to this the Perth market had fallen back started late 2006 -mid 2012, that is sure a long time between drinks
p

Macroeconomically, resource based Texas and WA have a lot in common. Let's look back at some economic history: If you had bought a house in Houston at the peak of the boom back in 1980, you would have waited almost 25 years to get your money back.

The oil never ran out. Common sense did. People paid ridiculous prices for property in the 80s and quite a few bottom fishers got caught out mid cycle. A member of my family - we are bottom fishers - bought a house in 1986 and its barely broken even after all these years.

Yes, the Perth market is showing signs of life. But let's not forget that WA is a cyclical, resource based economy. The lowest quintile of Perth propertywill do well. But the median, after adjusting for inflation, will be stagnant for the next decade. Trees cannot grow into the sky. Real (ie. inflation adjusted) wages, especially in the mining sector, cannot keep growing, its impossible. Hence the limits on how high Perth prices can go.....

If you are buying in Perth and want capital gain, it would be wise to buy the cheapest of the cheap of what's available in property, preferably something with development potential. Cheap ugly ducklings on dual occ blocks in places like Gosnells, Kwinana etc will outperform shiny new houses on single residential blocks elsewhere.

Just saying. I don't claim a monopoly on wisdom but I'm pretty old and have lived through quite a few cycles.

 

[John_]

Develop and sell simple really.

 

[sanj]

MTR i hope you make 50% your one of the genuine people here unlike some think 40%-50%

My property hunting has began with a buyers agent for a 2m project.

target 20% + 3% contingency REAL expectations.

In all honesty, people who bought sites in 2011 which were a) sold during the trough and b) multi unit sites sold as grouped dwelling sites due to lack of awareness, are indeed sitting on 40% profit when you take into account increase in resale prices VS what would have been expected when the sites were bought.

profitability on sites back then was pretty astounding, at least 30% was avaiklable on multiple sites and that is without taking into account the higher resale prices now.

feel free to disbelieve it, im just relaying what was there for everyone (who was looking) to see. my only regret is we didnt purchase more sites.

 

[sanj]

BTW Oneworld - you are right, i would be shocked to see many of the suburbs double in 7 years but that is why different strategies need to be employed in the current market.

I missed the previous boom and so have been building up experience and capital in the challenging years since then. You speak as though there is only one strategy out there.

 

[one world]

Develop and sell simple really.

For people with vision, energy and cash this may well be true.

BTW Oneworld - you are right, i would be shocked to see many of the suburbs double in 7 years but that is why different strategies need to be employed in the current market.

I concur. Intelligent people with energy and a sense of thrift will make money in development.

However, given Perth's overall median price, those who buy single residential sites and expect them to double in a decade may get hurt. A $700,000 house in Bullcreek or Mandurah is unlikely to double anytime soon. Nice to live in. But not so nice as an investment. Heck, you can buy houses in Beverly Hills for less than what some of Perth's middle class houses sell for.

 

[John_]

In all honesty, people who bought sites in 2011 which were a) sold during the trough and b) multi unit sites sold as grouped dwelling sites due to lack of awareness, are indeed sitting on 40% profit when you take into account increase in resale prices VS what would have been expected when the sites were bought.

profitability on sites back then was pretty astounding, at least 30% was avaiklable on multiple sites and that is without taking into account the higher resale prices now.

feel free to disbelieve it, im just relaying what was there for everyone (who was looking) to see. my only regret is we didnt purchase more sites.

I based it on today's market going out and buying a property for a multi unit development people should aim for 20% minimum with 2-4% extra for stuff ups and anything else above those figures is a bonus.

Right now if you take on a huge risk you might get 40-50% but i wouldn't and a lot of people wouldn't either IMO.

 

[sanj]

I based it on today's market going out and buying a property for a multi unit development people should aim for 20% minimum with 2-4% extra for stuff ups and anything else above those figures is a bonus.

Right now if you take on a huge risk you might get 40-50% but i wouldn't and a lot of people wouldn't either IMO.

I agree with the bolded part above, my point though is that you mentioned anyone making claims of 40% profit is telling fibs, im giving you an explanation of why that may be the case.

FWIW i passed on a difficult site mid last year due to a family member being in hospital that had the mythical 40% profit on it so they do exist, just are rare.