Perth Property Market updates

[Tano]

A downturn in Western Australia?

http://www.realestatetalk.com.au/a-downturn-in-western-australia-contributing-factors-explained/

8th quarter in the Perth metropolitan market, slowing sales transactions
12,105 listings currently on the market on REIWA.com
2015, we?d see a relatively flat sort of market, anywhere from 1-4% growth.

 

[Tano]

Heritage Bank has cut its discount variable home loan rate to 4.39% and its standard variable rate to 4.69% for loans greater than $150,000 with maximum LVR of 80%.

 

[westminster]

Heritage Bank has cut its discount variable home loan rate to 4.39% and its standard variable rate to 4.69% for loans greater than $150,000 with maximum LVR of 80%.

Nice if anyone wants to do a 4 pack.

 

[Tano]

Heritage will only look at a 4 unit development at 70% now (on end value), based on their thoughts around softening of market and tightening of their policies.

There are no banks now that will do a 4 unit development at 80% on residential at end value. Thats why my development fell through (fortunately). Im glad i could pull out and start again.

 

[sanj]

Heritage will only look at a 4 unit development at 70% now (on end value), based on their thoughts around softening of market and tightening of their policies.

There are no banks now that will do a 4 unit development at 80% on residential at end value. Thats why my development fell through (fortunately). Im glad i could pull out and start again.

70% on end value at resi rates is still decent, if margins are as they should be the project wouldn't need much of a capital injection

 

[westminster]

70% on end value at resi rates is still decent, if margins are as they should be the project wouldn't need much of a capital injection

Agreed though their 'end value' may be very conservative but still a good deal if you have a 30% plus site.

 

[Tano]

Perth Apartment Market

http://sourceable.net/no-glut-in-perth-apartments-colliers/

"the Perth market is witnessing a flurry of new apartments go up at a time when population growth in the short term at least is expected to slow as resource investment drops back: throughout Western Australia (no specific information given for Perth), a total of 7,258 multi-residential units and apartments were approved for construction throughout the 12 months to September this year, up from 4,411 two years earlier."


Perths CBD apartments seem to be much cheaper than Sydney/Melb. Would end 2015/start 2016 be a good time to snap up some of these apartments at the bottom of the cycle? If so, would you invest in something with a high land component (complex of less than 50?).

 

[Ausprop]

Would end 2015/start 2016 be a good time to snap up some of these apartments at the bottom of the cycle? If so, would you invest in something with a high land component (complex of less than 50?).

yes, could be good timingif this comes to pass

 

[MTR]

http://sourceable.net/no-glut-in-perth-apartments-colliers/

Perths CBD apartments seem to be much cheaper than Sydney/Melb. Would end 2015/start 2016 be a good time to snap up some of these apartments at the bottom of the cycle? If so, would you invest in something with a high land component (complex of less than 50?).

Just because its slowing down does not mean 2015/16 will be the bottom of the cycle on the contrary I think its early days.... , it can go on for years, we just don't know. Personally I will be watching all markets around Australia for opportunities.

However, I think the writing is on the wall and we are in for a bumpy ride (Aust wide), we are already starting to hear a great deal of negative media reports, not good as buyers react anxiously to this and do nothing. At the moment 50% of the buyers are investors.

I have offloaded some of my stock already in anticipation of the downturn, take some of my profits off the table. In saying this I believe there are always opportunities but for me its also about managing my debt, especially when the market turns.

That was a mouth full, sorry back on topic...IMO just sit and wait there is absolutely no rush to jump in 15/16 unless there is some amazing deal.

Buying land vs apartments, dependent on strategy etc. if buying land it is expensive to hold especially in Perth, its crazy as we know deve sites have had incredible growth. If you can snap up land at cheap cheap prices great, in the near future we may start to see this happen as developers start offloading because they know if they build they can not sell their stock.

 

[z611143]

Just because its slowing down does not mean 2015/16 will be the bottom of the cycle on the contrary I think its early days.... , it can go on for years, we just don't know. Personally I will be watching all markets around Australia for opportunities.

However, I think the writing is on the wall and we are in for a bumpy ride (Aust wide), we are already starting to hear a great deal of negative media reports, not good as buyers react anxiously to this and do nothing. At the moment 50% of the buyers are investors.

I have offloaded some of my stock already in anticipation of the downturn, take some of my profits off the table. In saying this I believe there are always opportunities but for me its also about managing my debt, especially when the market turns.

That was a mouth full, sorry back on topic...IMO just sit and wait there is absolutely no rush to jump in 15/16 unless there is some amazing deal.

Buying land vs apartments, dependent on strategy etc. if buying land it is expensive to hold especially in Perth, its crazy as we know deve sites have had incredible growth. If you can snap up land at cheap cheap prices great, in the near future we may start to see this happen as developers start offloading because they know if they build they can not sell their stock.

Why do you think we are in for a bumpy ride @MTR

i kinda sort of agree. Just wanted to here some reasons why?

Resources dropping? Aus dollar not performing? Ect

 

[MTR]

All of these will effect market sentiment.

When people start to read negative reports and lately this is all we are hearing, fear sets in and property is all about supply and demand, so if buyers drop off so do prices. If you really want to know how a specific market is going just look at how long it is taking to sell, how much stock on the market and contact at least 3 agents in the area.

My point is don't count on growth because it may not happen.

 

[WesternRat]

kind of confusing, because they have reports of recessions and mass layoffs in the news, while on the same day they are also saying first home buyers are flooding the market due to low interest rates.

 

[Tano]

Rate cut next year?

http://www.propell.com.au/blog/australian-real-estate/construction-activity-declines-again/

?The latest slump came after one of Australia?s most respected economists, Westpac?s Bill Evans, made a surprise call on Thursday afternoon that the RBA will have to cut the cash rate over the coming months to help breathe life into a stagnant local economy."

"Mr Evans is forecasting two 25 basis point cuts in February and March next year, followed by a period of interest rate stability until rates go up again in 2016. The cuts would take the central bank?s interest rate down to 2%.?


Whats the most accurate way to predict which way rates will go? I heard someone mention something about banks credit swap rates or bank bill rates on the open money market??

 

[perthguy]

kind of confusing, because they have reports of recessions and mass layoffs in the news, while on the same day they are also saying first home buyers are flooding the market due to low interest rates.

Last year I attended a number of home opens with up to 150 people at the opening. That was manic! In the last few weeks I have attended a number of home opens where I was the only person or there was just one other couple. These were nice, well priced, well located properties too, not just some overpriced rubbish. To me it is not confusing at all. If you want to know what the market sentiment is, get out there. It is very quiet in my area.

 

[INVSTOR]

kind of confusing, because they have reports of recessions and mass layoffs in the news, while on the same day they are also saying first home buyers are flooding the market due to low interest rates.

I listen to my own news. If my FHB tenants report to me they have just secured a property after 6 months of making offers I take it as there could be a slow down in FHB activity. (Happended twice in past few months!) If I have applicants working in mining industry suggesting there has been 50 layoffs at the workplace in past month so they'd prefer to rent than buy currently, I take that on board. Media often don't report until it's well and truely happening.

Last year I attended a number of home opens with up to 150 people at the opening. That was manic! In the last few weeks I have attended a number of home opens where I was the only person or there was just one other couple. These were nice, well priced, well located properties too, not just some overpriced rubbish. To me it is not confusing at all. If you want to know what the market sentiment is, get out there. It is very quiet in my area.

What suburb and/or how many k's from city?

 

[sanj]

Last year I attended a number of home opens with up to 150 people at the opening. That was manic! In the last few weeks I have attended a number of home opens where I was the only person or there was just one other couple. These were nice, well priced, well located properties too, not just some overpriced rubbish. To me it is not confusing at all. If you want to know what the market sentiment is, get out there. It is very quiet in my area.

I remember going to a home open Julie pedulla was doing in Mt hawthorn around 18-24 months ago, I think 140 people attended and they had 13 or so offers in the first 24 hours. Crazy

 

[perthguy]

What suburb and/or how many k's from city?

Rivervale.

 

[perthguy]

I remember going to a home open Julie pedulla was doing in Mt hawthorn around 18-24 months ago, I think 140 people attended and they had 13 or so offers in the first 24 hours. Crazy

That's mad! but at least Mt Hawthorn is a decent suburb. The worst I went to was Embleton of all places. At least 150 at the inspection, 18 offers, on the market 48 hours and sold for more than 100k over list price. That home open was the scariest I have been to. I thought there was going to be a punch up!

 

[Ausprop]

I listen to my own news. If my FHB tenants report to me they have just secured a property after 6 months of making offers I take it as there could be a slow down in FHB activity.

more likely due to most FHB's now building to secure a much bigger grant. this is also keeping a lid on prices

 

[Ausprop]

http://www.propell.com.au/blog/australian-real-estate/construction-activity-declines-again/

?The latest slump came after one of Australia?s most respected economists, Westpac?s Bill Evans, made a surprise call on Thursday afternoon that the RBA will have to cut the cash rate over the coming months to help breathe life into a stagnant local economy."

"Mr Evans is forecasting two 25 basis point cuts in February and March next year, followed by a period of interest rate stability until rates go up again in 2016. The cuts would take the central bank?s interest rate down to 2%.?


Whats the most accurate way to predict which way rates will go? I heard someone mention something about banks credit swap rates or bank bill rates on the open money market??

you are asking us how you can predict interest rates more accurately than Westpac's chief economist?