Perth Property Market updates

[Ausprop]

The 8% is holiday accommodation right?
If so, then you perhaps renting for 10 weeks of the year? does that cover all out of pocket expenses??

10 weeks no way... I am struggling to find any vacancy at all, I would say I'm currently at 75% occupancy so if I can get those final nights out I can push the yield higher. I think I can achieve close to full occupancy by selling my unwanted nights through BBX - possibly, will see when I get a decent block of vacancy.

Perth high end may actually be adequately supplied as the migration unfolds, just a thought

each to their own, I would rather 1 or 2 high value, high growth, high yield properties than 20 dog boxes, but that is just the result of my own journey

 

[MTR]

each to their own, I would rather 1 or 2 high value, high growth, high yield properties than 20 dog boxes, but that is just the result of my own journey

I don't care, I learnt a long time ago not to fall in love with property, if its a dog because its State housing but has made me quick money, give me 20
Blue chip can actually fall harder when the market turns, high end stuff has not moved since crash of late 2006, that's a long time between drinks, and holding costs along the way will be a killer.

Anyway, back to holiday accomm 75%, that is pretty damn amazing, must the popular, you wont get this in Mandurah, perhaps too much supply, you would be lucky to rent for 10 weeks pa.

The negative side to holiday accommodation is that everything has to be perfect, people paying top $ for peak etc. and they insist on this. Do you bill your tenants for cleaning when they leave?? I think this would be a must.

 

[Ausprop]

yes you need to pick your market, i agree Mandurah doesn't work. I have investigated that market and I think you achieve more yield on normal long term lets.

yes they are billed for the cleaner which ranges between $60-$120/hr down there (!) and the linen hire, but at the end of the day it's a competitive business so you have to have a feel for how to quote, when to absorb costs, when to go for it etc

shouldn't be any holding costs... cash flow positive remember

 

[eeew]

Look it up yourself, sydney is about 50% more. How that represents better value than perth is beyond me but happy to disagree here

Also on the one hand you say you're not referring to $$, on the other you're making references to house prices.

Refer to RPDATA on medians as of oct 31 2014:

http://www.corelogic.com.au/resources/pdf/indices/2014-11-03--rpdata-rismark-home-value-index.pdf

It says syd is 680k median whereas perth is 525k median, representing about 30% higher in syd compared to perth.

 

[Tano]

Refer to RPDATA on medians as of oct 31 2014:

http://www.corelogic.com.au/resources/pdf/indices/2014-11-03--rpdata-rismark-home-value-index.pdf

It says syd is 680k median whereas perth is 525k median, representing about 30% higher in syd compared to perth.

It would be good to see the data in finer detail.
eg Sydney House prices in Metro area (non regional) vs Perth Houses Metro

eg Exlude all units, apartments, land etc and exclude regional areas.

 

[Tano]

Instant Start - Building reform

http://www.formscape.com.au/index.php/blog/item/7-planning-alert-instant-start-building-reform

Government moves to cut delays for home builders. allow builders to commence work at the point when a privately certified permit application is lodged with the issuing Authority. The reforms announced also propose removing the requirement for homeowners to seek a separate planning approval for R-code compliant renovations and extensions.

 

[Ausprop]

It would be good to see the data in finer detail.
eg Sydney House prices in Metro area (non regional) vs Perth Houses Metro

eg Exlude all units, apartments, land etc and exclude regional areas.

and the distance of a median priced Sydney home from the Sydney GPO, compared to Perth.

 

[Tano]

Property Price Measures

Just a note on why the data is different for different sources:

Unadjusted Median

• REIWA

Mix-Adjusted/Compositional Change

• ABS
• APM -Price Composition Adjusted

Regression-based Techniques

• Residex - Repeat Sales Method
• Rismark- Hedonic Approach (RP Data)

 

[thokkotu]

What does the Team think about 2 bedroom units in North Perth or East Perth ?
such as units in small blocks of 12 or less ?
Will they have at least a decent rental demand over the next few years ? i have unfortunately invested in 2 projects that are now expected to finish over year !

Any thoughts or advise much appreciated

 

[Ausprop]

how much are you looking to spend? Perth relative values have become a bit messed up over the past few years such that you can buy in the western suburbs - with a bit of looking around - for similar money to other inner city suburbs

for example I built this complex and am gobsmacked at the prices out that way these days....

http://www.realestate.com.au/property-townhouse-wa-victoria+park-118201431

where as you could get this honey for the money....

http://www.realestate.com.au/property-duplex+semi+detached-wa-daglish-118361863

actually I quite like that one!

 

[westminster]

What does the Team think about 2 bedroom units in North Perth or East Perth ?
such as units in small blocks of 12 or less ?
Will they have at least a decent rental demand over the next few years ? i have unfortunately invested in 2 projects that are now expected to finish over year !

Any thoughts or advise much appreciated

Why do you say unfortunately? I am seeing lower rental returns currently in the area but that is also over much of Perth

How much rent are you expecting?

 

[thokkotu]

thanks,
its costing me around 575,000 per unit, so when finished i was hoping to get $550 / week or so ...'

http://www.realestate.com.au/property-apartment-wa-north+perth-118453647

this is one of the units in the block from north perth that someone else is hoping to sell ...
What rent do you think it will fetch

 

[sanj]

Was that bought through eos? How far behind schedule are they and how much lower than their 3 stomach market value is this property selling at?

 

[westminster]

thanks,
its costing me around 575,000 per unit, so when finished i was hoping to get $550 / week or so ...'

http://www.realestate.com.au/property-apartment-wa-north+perth-118453647

this is one of the units in the block from north perth that someone else is hoping to sell ...
What rent do you think it will fetch

That is a really nice complex and unit. I think that currently it would fetch $550-575pw.

 

[thokkotu]

Was that bought through eos? How far behind schedule are they and how much lower than their 3 stomach market value is this property selling at?

hello Sanj
yes this is from EOS property group and is running very late, in fact we have not started contruction after 1 year of settlement. The expected contruction cost has gone up considerably from around 480,000 per unit to 580,000 per unit.

Do you think the unit is worth that much ? I am not sure of the EOS Build finish but time will tell and i will keep other investors updated

 

[thokkotu]

That is a really nice complex and unit. I think that currently it would fetch $550-575pw.

Thanks that gives me some confidence, its not built yet and we hope to get it build to that standard. is Loftus street and good spot in North Perth ? would it sell when ready from your experience

 

[MTR]

Sorry to hear that this project is not going too well.

If holding, you could always look at fully furnishing the property to try to achieve higher rental return, however this also means higher PM fees? Rents have fallen back everywhere in Perth, but who knows in 12 months could bounce back I think??

Location is OK, however there are lots of apartments going up in Perth at the moment, there has been lots of talk of over supply, but once again I am not sure whether this is the case in North Perth and it will be very much dependent on what/how many apartments come on the market over the next 12-18 months.

One important factor to consider on completion is bank valuation, if it comes under $580K then you have to cough up the difference. I personally think $600K for 66 sqm apartment is too expensive in this current market for this location, has to have a 5 in the front just my opinion from a quick search.

I would just do a little research and compare recent sales in similar location/area, same product, just to keep your finger on the pulse.

Also, have EOS given you any idea when this project will be completed??

MTR

 

[thokkotu]

Sorry to hear that this project is not going too well.

Also, have EOS given you any idea when this project will be completed

Another 18 months....
Cost overruns

 

[MTR]

Sorry to hear that this project is not going too well.

Also, have EOS given you any idea when this project will be completed

Another 18 months....
Cost overruns

really, so this will mean additional holding costs that you will be wearing. I would work out the additional costs of this and also realistically what it can sell for today and weight up whether it is in fact better to on sell, take your deposit and move on. Perhaps less stress/risk.

You said you have 2 projects on the go with EOS, does the other project also having issues.

 

[westminster]

hello Sanj
yes this is from EOS property group and is running very late, in fact we have not started contruction after 1 year of settlement. The expected contruction cost has gone up considerably from around 480,000 per unit to 580,000 per unit.

Do you think the unit is worth that much ? I am not sure of the EOS Build finish but time will tell and i will keep other investors updated

Ouch $100k increase. That was your profit waving goodbye wasn't it. Ouch

That REA ad says it's 66sqm internal but I swear it must be bigger. That is not a 66sqm design.

I do think it's worth that much. Loftus St is a main arterial but that is a very nice design.