Perth Property cycle - Applecross beginning of a neg trend?

[babelfish]

Firstly, this is my first post - I've been lurking a while and can't believe how generous and informative this forum is....

I'm living in remote WA, don't know Perth, but am wanting to buy first IP there this year. Have been madly trying to educate myself.

My question is:

According to supplement in Sunday Times Magazine 2/3/2003, growth in Applecross has now fallen to negative 2.1% average for all dwellings and land. According to REIWA site (which by the way does not show it as negative yet) % growth for 30 years compared to Perth average has been falling in this suburb for ages....

According to Sunday Times:

5 year CG : 8.04% - houses and 5.22% - units
12 month: -2.16 - houses and 10.17% - units

I wonder if someone can help explain these figures to me? Is it just too expensive and so people are buying units there now?

What I am worried about, is this a mirror of what is about to happen in the rest of Perth - a correction? Or is this suburb just way ahead on the property cycle? It seems a "good area" on the map, near water etc. so even if correcting, would you expect it to go negative in growth? Is this the beginning of the end of the boom?

Thanks so much, any input is welcome.....

 

[tonyd]

Hi babelfish,

I didn't read the Sunday Times supplement you refer to.

I'm relatively inexperienced at the IP game so read my comments with that in mind.

Looking at a comparison of Applecross and Perth shows that Applecross is doing very well.

According to the 30 year median price trend, Applecross has averaged 11.3% from 1971-2001.

Short-term negative growth figures are not too uncommon as rising prices shift buyers to neighbouring suburbs - the property wave. But it is normally short-lived for suburbs with a solid history of capital growth.

There are a few things going on though that may be affecting the dynamics of the Applecross market.

The details are a bit fuzzy in my mind, but there is a proposed development for a 15-17 story apartment complex on the Raffles Hotel site next to Canning Bridge.
Also there is construction underway on another smaller apartment complex on the other side of Canning Hwy with water views - about 6 stories I think.

The locals aren't happy with the Raffles development but it looks like it has been approved subject to a few changes.
See the City of Melville website http://www.melville.wa.gov.au/

The question is how the sudden increase in supply of luxury units will affect the desirability of existing units and houses.
That's left as an exercise to the reader

Hope that helps.

cheers, Tony

 

[babelfish]

Thank you Tony

You are right about 30 yr figures - must have had my eyes crossed - sorry

Thanks for points on 15-17 storey development - I actually just heard about that on ABC radio news re council disputing with developer about how high ie 15 or 17.

Thanks for comment on the cycle thing - I was worried about the negative element rippling out to Perth in general, but as you pointed out, there may be local issues and the neg. trend is unlikely to continue for long with its CG history.

Ta

 

[Nicko]

Applecross is an expensive area.

Peppermint Grove also showed a negative result, from memory.

These two suburbs are so expensive because the compounded rise in their values over the years has placed them there.

Limited sales data would've created the negative figure.