Perth to become most expensive city!

[alexlee]

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Dear Alex,

1. How's about Sydney?

2. Is it above its average long term growth rate already?

I would say sydney is still (cumulatively) above its long term growth rate. I also think this based on the low rental yield since I believe that long term property values track fundamentals which is reflected in yields. Yields in your 'battler' suburbs are barely in the 4% range.

In short, I still think Sydney will fall. I would say Melbourne and Brisbane are better buys. Don't have much research on Adelaide.
Alex

 

[redwing]

WA also has a whole host of new immigrants just waiting to enter the State, most originate from QLD I believe but are coming in via the NT and causing concerns as they have a history of upsetting and displacing the locals.

See Link

 

[stretchy]

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Dear Stretchy,

1. Taking the data at face value, I agree with you that it is quite likely that there is going to some excess housing supply occurring at the end of this year and probably more in 2007.

2. The second thing about your data is that the annual housing demand seems to have increased to 21,100-22,600 units per year from 2005/2006 onwards. This is some 62% more than what was previously reported ( around 13,500 units per year).

3. I wonder if the annual release of vacant land lots has gone up similarly?

4. It was last reported to be about 4,800 lots per year, which is some 41.7% less than annual 11,500 lots released in Victoria.

5. If annual housing demand has increased by more than 60% and land release still remain low at 4,800 lots per year, then I wonder how are they going to achieve the high annual housing start figures of more than 20,000 units per year.

6. Anyone care to comment and discuss further, please?

7. Thank you.

Cheers,
Kenneth KOH

Kenneth,

I assume that housing starts also incorporate redevelopment in inner/mid suburbs, like townhouses/villas. One old block can handle 3-4 new townhouses.

In Balcatta, I drove around one weekend and counted no less than 17 townhouse developments in progress. Assuming each development can handle 4 units, thats an extra 68 dwellings.

 

[kph]

WA also has a whole host of new immigrants just waiting to enter the State, most originate from QLD I believe but are coming in via the NT and causing concerns as they have a history of upsetting and displacing the locals.

See Link

Say what ???????????
A history of upsetting locals ???

I am finding a lot of the employees in the mining and power industry, moving over to Qld. There is a steady stream of it every year.
Its a real battle trying to retain ppl over here, even with the higher pay packets.
I guess they are at that stage where they are choosing 'lifestyle' over well paid work.

I am hearing that NT and Qld are buzzing. Both busy with strong markets.

I'm voting Qld both around Bris as well as up the sunshine coast.

Not sure about Perth right now, except for regional WA (at the risk of sounding like a broke record... )

kp

 

[cabo wabo]

Dunno, but that toad looks aweful big, and doesn't seem to cast a shadow. Hmmm... transperant toads....

 

[The Fence]

Sydney, supposedly, has had a housing shortage for years. Doesn't necessarily mean house values will go up. It probably means rents will go up to catch up with prices, though.
Alex

This is indeed under way now and after todays rate rise it will gain momentum......the cycle continues......round we go.....WA coming off over the next couple years...starting now..... and Sydney beginning a rental crisis.....

.......2008..........Oh my god, those yields in Sydney look good now ! Wow !!!......lets drop Perth and get back into it on the East coast....it's the go now......Oh and this would be a wise move too IMO... If you've been astute you will have made a motza and have the opportunity to do it all again in Sydney/East Coast.

I love Perth and understand how this run up has occurred but I feel there are some out there who have overshot the mark and think it's a never ending story......I also, think that Perth/WA has been a sleeping giant for many years and this has also contributed, but, I can't see it becomming the leader in Real Estate forever....Just my opinion.

I'm very interested in the 'effect' this rate rise today will have in the next month or two, even with Christmas on the doorstep......?

Interesting times.

Cheers!
Thorpey

 

[Rixter]

I'm very interested in the 'effect' this rate rise today will have in the next month or two, even with Christmas on the doorstep......?

That makes the 2 of us...especially since I'm in the market to purchase another two IP's.

I am temporarily holding off until the new year when the fall out effect from todays rate rise and Xmas expenses are maximised, thus producing a few more bargain opportunities.

 

[Celeste]

Hi all

Originally Posted by redwing
WA also has a whole host of new immigrants just waiting to enter the State, most originate from QLD I believe but are coming in via the NT and causing concerns as they have a history of upsetting and displacing the locals.

I think Kph should have a look at the link. LOL

A wonder if they could use a 1 bed reno'ed apartment, when they get here?

Celeste

 

[The Fence]

Ssssshhhhhh Rixter...!!!

 

[thedon]

That makes the 2 of us...especially since I'm in the market to purchase another two IP's.

I am temporarily holding off until the new year when the fall out effect from todays rate rise and Xmas expenses are maximised, thus producing a few more bargain opportunities.

Hi Rixter

Almost completed a reno on a unit and will offload it soon and realise a nice Capital Gain (mainly from market not the effort put in).

I'm in the market to get another IP for reno, but with prices now nearing $500k for your average 1980's dump North of River, and rental yields ridiculously low it just not seem logical to get in before xmas so I agree with you there.

With the possbility of prices stagnating I'm thinking buying a block of land then building would be less risky?

Any thoughts on this strategy? Surely buying an IP now at what seems an unusal peak does not make sense to me???

Don

 

[Rixter]

Hi Rixter

Almost completed a reno on a unit and will offload it soon and realise a nice Capital Gain (mainly from market not the effort put in).

I'm in the market to get another IP for reno, but with prices now nearing $500k for your average 1980's dump North of River, and rental yields ridiculously low it just not seem logical to get in before xmas so I agree with you there.

With the possbility of prices stagnating I'm thinking buying a block of land then building would be less risky?

Any thoughts on this strategy? Surely buying an IP now at what seems an unusal peak does not make sense to me???

Don

Hi Don,

I wasn't referring to buying in Perth..I abandoned the Perth market (still with Perth holdings that have enjoyed the CG ride very nicely) some time ago now and turned my attention to the eastern seaboard, mainly Brisbane.

This is where my current focus still is in relation to my next purchases comment.

 

[on the move]

Forgive me for being ignorant - I've only been to Perth once when my son was 6 months old, thirteen years ago. All I remember Perth was extremely hot and nothing but flat sand dunes. Will I pay more for a house in Perth than Sydney or Brisbane, definitely not. Will I live in Perth, the answer will be a no as well - too isolated.

 

[Rixter]

Will I live in Perth, the answer will be a no as well - too isolated.

Perth is well reknown for being the most isolated city in the world. Would you invest there, if not, why not?

 

[on the move]

Rixter,
I wll invest anywhere if the numbers stack up, but unforetunately I did not have the forsight & missed the boat. In the long run I still think QLD is the go (looking at the trend in America where people move to warmer climate such as Calfornia & Florida).
cheers
on the move

 

[Rixter]

Rixter,
I wll invest anywhere if the numbers stack up, but unforetunately I did not have the forsight & missed the boat. In the long run I still think QLD is the go (looking at the trend in America where people move to warmer climate such as Calfornia & Florida).
cheers
on the move

I agree on both your points

 

[redwing]

But not to far North otherwise Darwin would be bursting at the seams..

 

[thedon]

Forgive me for being ignorant - I've only been to Perth once when my son was 6 months old, thirteen years ago. All I remember Perth was extremely hot and nothing but flat sand dunes. Will I pay more for a house in Perth than Sydney or Brisbane, definitely not. Will I live in Perth, the answer will be a no as well - too isolated.

Hi

I live in Perth and have commuted to East Coast for work around 30 weeks of year, isloation makes no differnce to me, just an extra 2-3 hours in the air as compared to going MEL-BRI. Don't let that map deter you! I did some work for a company in QLD who had offices from Bris to Melb and when I asked why not WA they said too far! Imagine shutting out a huge potential market for the sake of 2 more hours on a plane??? Sure if freighting goods it may be more expensive but not much. Just my 2 cents!

I can't see WA property being more expensive than NSW in the medium - long term though.

Don

Don

 

[asdf]

Why not Don? Theres only so many banking, IT, HR, marketing and consulting jobs that pay 6 figures. From what I hear, a heap of 20 something blue collar workers are all getting that in the mines and out in the rigs, Then you have the tradies servicing the building industry...

 

[alexlee]

Jobs attract people, and if you can sustain that the culture and entertainment follows. Look at places like Las Vegas.

 

[Beef_Hooked]

From what I hear, a heap of 20 something blue collar workers are all getting that in the mines and out in the rigs, Then you have the tradies servicing the building industry...

Another amazing figure realting to WA, Unfortunately divorce rates have also risen by 21% this year where most other states have fallen by 1 or 2%.
Entirely due to the FIFO lifestyle, no doubt.

You can see it on the ground, Over the past year I have noticed many other Dad's with their kids, awkward and not knowing how to relate to them. At social functions all the FIFO guys sit together and do what they have been doing up north, get drunk and moan about Tax and the price of RE.

What impact will these divorces have on society in a few years time? I dunno but having known many children of broken families it's not a good look.