Perth Market Flooded And No Sales

Steve Fitz

Steve Fitz

A RE agent friend of mine posted this recently on facebook -

RPData Properties on the market in WA 33,980 with less than 0.8% selling weekly ... the highest amount of properties on the market in WA history with the lowest percentage selling in history​

Sounds like a recipe for big downward movement...

New home sales is down for the 4th consecutive month in WA according to the HIA.

Anyone care to offer further insights?
 
Might be a lot on the market but the shortage of housing, rentals and so forth isn't going to disappear.
Don't think we are going to see a big downward movement. Stagnate prices yes.
 
A 20-30 % price correction would solve the problem, but from the experience from overseas it takes a while for sellers to accept new realities like this so the drop could take a couple of years.
 
joeExpat said:
A 20-30 % price correction would solve the problem, but from the experience from overseas it takes a while for sellers to accept new realities like this so the drop could take a couple of years.
Click to expand...

most of the premium property in perth has had that already, if not more. a halving in values in the boom state is sounding nuts
 
funnily enough - take a drive along west coast drive.

all the premium beachfront property is sold - sold - sold - sold - under offer - sold - sold.

i've noticed in the last 3 months that a lot of stock has actually come off the market, sold or not.

interesting times - it's not panic stations yet (well, all the REAs are going hungry) but i think a lot of folk in WA have accepted that their houses wont sell quickly. not a lot of price movement though, so i don't think sellers are deperate otherwise the REAs would be slashing.

i've been on for four months with strong open interest, but not one offer on the table. maybe buyers are TOO picky...? it's like they're all waiting for the next best house to come on next door at $100k less, forgetting that next door is smaller and lesser spec and it's rented.
 
Steve Fitz said:
A RE agent friend of mine posted this recently on facebook -

RPData Properties on the market in WA 33,980 with less than 0.8% selling weekly ... the highest amount of properties on the market in WA history with the lowest percentage selling in history​

Sounds like a recipe for big downward movement...

New home sales is down for the 4th consecutive month in WA according to the HIA.

Anyone care to offer further insights?
Click to expand...
My friend has had her property on the market for 5 weeks. She's had 1 really low offer, and showing more people through today. I told her if she's considering accepting their offer, I'll buy it. It's more of a "summer" house so I think she could get more for it as the weather warms up. This house that sold in Ashfield would have to be a record price http://www.realestate.com.au/property-house-wa-ashfield-107536264
 
Aaron Sice said:
funnily enough - take a drive along west coast drive.

all the premium beachfront property is sold - sold - sold - sold - under offer - sold - sold.

i've noticed in the last 3 months that a lot of stock has actually come off the market, sold or not.

interesting times - it's not panic stations yet (well, all the REAs are going hungry) but i think a lot of folk in WA have accepted that their houses wont sell quickly. not a lot of price movement though, so i don't think sellers are deperate otherwise the REAs would be slashing.

i've been on for four months with strong open interest, but not one offer on the table. maybe buyers are TOO picky...? it's like they're all waiting for the next best house to come on next door at $100k less, forgetting that next door is smaller and lesser spec and it's rented.
Click to expand...

We had 5 months on the market with huge interest. prolly 10 real buyers all up but no one could get finance. Finally got a cash buyer out of the blue 25k less than our asking. Its 25k more than we thought we would originally list for so we are happy.
The valuer told me that there is no shortage of buyers its the banks not lending causing the over supply.
Also advertised our rental last week got 12 interested parties in the first day.
There is more to this market than meets the eye.
There is some screaming good buys around Mandurah at the moment. Yeilds are shocking though. Sold signs are starting to pop up everywhere.
Its purely the hold and hope for quick big GG [if you can afford it]
I am glad to be packing
cheers
 
Yep, yeilds are shocking. Take a look at listings at Ashfield at the moment.
Add - Just saw a house sell for $905,000 recently, listed for rent at $400/wk
 
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Perth is looking to have some of the best capital growth in Australia over the next 2 - 5 years. Yes, I do have a conflict, but the fundamentals stack up.

- Supply levels have dropped down to acceptable levels high 15Ks and stayed there for about a month.
- The "blue-chip" investment suburbs around median price are starting to have a shortage of stock. Padbury, Craigie, City of Belmont... Yada Yada Yada
- Need I mention a 2 speed economy?
- Stagnant price growth over the last 3 years, even though the East Coast property prices have continued their upward momentum.
- Lots of urban infill changes taking place.

Unless there is a GFC mk2, or some other catastrophic event we should see strong consistent growth in Perth.
 
Kent Cliffe said:
Perth is looking to have some of the best capital growth in Australia over the next 2 - 5 years. Yes, I do have a conflict, but the fundamentals stack up.

- Supply levels have dropped down to acceptable levels high 15Ks and stayed there for about a month.
- The "blue-chip" investment suburbs around median price are starting to have a shortage of stock. Padbury, Craigie, City of Belmont... Yada Yada Yada
- Need I mention a 2 speed economy?
- Stagnant price growth over the last 3 years, even though the East Coast property prices have continued their upward momentum.
- Lots of urban infill changes taking place.

Unless there is a GFC mk2, or some other catastrophic event we should see strong consistent growth in Perth.
Click to expand...

Indeed you do have a conflict, but at least you admit it. You forgot to put hope in your list :D
 
Kent Cliffe said:
Unless there is a GFC mk2, or some other catastrophic event we should see strong consistent growth in Perth.
Click to expand...

Well, that is a BIG caveat right there... GFC 2 is inevitable IMHO.

Greek 1 yr bond yield just surpassed 93%, hence their default is now almost certain, Swissy just got caught up in EU mess & Franc is now pegged to Euro (this is big news), & despite Trillions of $$$ injected into the US economy this past 2 years the "official" unemployment rate is ~9.1% (real rate closer to 16%) and the subprime mortgage issue is NOT over.... Govt just launched Billions in lawsuits at 17 big banks..... Oh, and Bank of America would have already collapsed without Warren Buffett stepping in with a $5 Billion prop last month...

GFC 2 is far far more likely than not...

IMO, the patient investor will grab some real RE bargains soon, particularly those that had the foresight to financially preposition themselves.... ;)
 
Good growth in the next 2-5 years? You are kidding right? Prices have been falling in real terms since ~2007. Deflationary expectations have set in.

The mining boom does not employ enough % of this state to prop up housing. Did you read the recent report that the number of small businesses going under is at an all time high?

Kent - want to make a wager on whether Perth property is worth more or less in two years?
 
Indifference said:
...despite Trillions of $$$ injected into the US economy this past 2 years the "official" unemployment rate is ~9.1% (real rate closer to 16%)...
Click to expand...

I'm in the US at the moment, and at every mall I go to I'm seeing 'NOW HIRING' signs on shopfronts. Perhaps the pay being offered is not meeting expectations?
 
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