Perth to become most expensive city!
- Thread starter alexlee
- Start date
actually ASDF I can confirm that there does seem a high degree of FIFO workers applying for my villa rentals. I love it - they can afford the rent and they are hardly ever there = less wear and tear on the property. IMO there are not many people that need a 4x2 (says me in a 5x2), but then again not many people need a 4x4 either! (says me about to hit the showrooms)
Sydney I could understand, a beautiful international city with heaps to do. From my last visit the houses look cheap to my eye, but talking to locals gives a less than enthusiastic spin to it. Brisbane I don't see... a little warmer than Perth but higher humidity, no beach, wooden houses, no real attraction and I am not sure what it is suppose to be close to? I take my hat off to the govt there tho, they appear to be very proactive and enterprising and have done well to take it as far as they have. now if we were to talk about port douglas that's a different kettle of fish.
with this isolation thing we need to remind ourselves... we live in australia. we are close to nothing! you need to deal with this or move elsewhere with all the associated problems of overcrowding. I just got back from hawaii, my ideas of tropical paradise were shattered by constant gridlock (but I love the place regardless). mahalo.
I think people put far too much into the 'people will select a nice city to live in' concept. This theory (basically that people will choose to live where the environment is good, hence seachange and treechange locations) assumes that we're all carefree rich people simply looking for lifestyle.
In reality, the majority of the population is just getting by and working hard.
I just came back from Hong Kong and everyone tells me to go to Shanghai. Hong Kong itself is a polluted hole, and Shanghai is even worse. So why go there? Jobs and business opportunities. THAT is what will drive property. Why have mining towns in the middle of nowhere boomed, despite zero 'desirability' in terms of living environment? Jobs. High paying ones.
Is a young family (the driving force of property booms at the lower price levels, really) going to say 'we'll choose this city with the beaches and water, even though it has no jobs'? Of course not. They'll go where the jobs are. It doesn't matter that Sydney might be 'nicer' than Brisbane because it has an ocean. Brisbane will still be desirable as long as there are jobs.
Most large cities aren't very nice places to live (New York, central London, Hong Kong, Tokyo). There is far better quality of life in the smaller cities or even the countryside. So why do people keep streaming into the cities? Because that's where the jobs are.
Alex
In reality, the majority of the population is just getting by and working hard.
I just came back from Hong Kong and everyone tells me to go to Shanghai. Hong Kong itself is a polluted hole, and Shanghai is even worse. So why go there? Jobs and business opportunities. THAT is what will drive property. Why have mining towns in the middle of nowhere boomed, despite zero 'desirability' in terms of living environment? Jobs. High paying ones.
Is a young family (the driving force of property booms at the lower price levels, really) going to say 'we'll choose this city with the beaches and water, even though it has no jobs'? Of course not. They'll go where the jobs are. It doesn't matter that Sydney might be 'nicer' than Brisbane because it has an ocean. Brisbane will still be desirable as long as there are jobs.
Most large cities aren't very nice places to live (New York, central London, Hong Kong, Tokyo). There is far better quality of life in the smaller cities or even the countryside. So why do people keep streaming into the cities? Because that's where the jobs are.
Alex
Same with Kellyville in Sydney, surely. Not enough jobs to support the number of people but people are commuting to the city because they thought it was an affordable big house. It's a combination of jobs / salary, housing affordability and environment.
I think downsizing is going to happen, resulting in increased demand for townhouses and big units. But does that necessarily mean prices for houses on big blocks is going to fall? I think demand for houses will be met by young people growing up and having families and immigrants (who tend to be younger - or they should be if the govt is smart) and supply of stand lone houses from downsizing boomers will be smoothed by inertia and boomers realising that they won't actually free up that much cash by downsizing.
i.e. I still think below median houses aimed at the first home buyer is a good investment.
Alex
A lot of them are in the building industry and associated property services. Looking around places like Rockingham and Mandurah I see many many utes and trailers with mixers tools etc on the road and parked in driveways.
If there is a slow down in construction, due to lack of building blocks, will this equate to a reduction in those jobs and the follow on into the lower/mid range market. Is it possible that this could become a feedback loop?
Property goes up --> people feel richer --> people spend more --> economy grows --> people are more confident and buy bigger houses --> demand for more property
This is generally believed to be what pulled the US out of recession in 2001. On the other hand, if property goes down and people feel poorer and don't spend as much.....
Alex
This is generally believed to be what pulled the US out of recession in 2001. On the other hand, if property goes down and people feel poorer and don't spend as much.....
Alex
yes seems to be the common train of thought now... US housing bust, fall in demand, recession, stockmarket collapse, demand upon China drops, commodities demand drops.
about time too, have been waiting for years to buy some cheap shares! just not sure how half the population will retire with property and share prices falling. then again it is only one of many theories and may never happen
about time too, have been waiting for years to buy some cheap shares! just not sure how half the population will retire with property and share prices falling. then again it is only one of many theories and may never happen
It takes guts to buy when things are really cheap. How cheap do they have to be? Like in March 2003, half the ASX top 50 could have been positively geared into if you count franking credits, yet the selling was unabated. People were panic selling shares to buy Sydney property LOL.
The banks were paying 6% fully franked divs. Tabcorp was paying 6.7% FF. Qantas was 6% FF. Bluescope was paying 6% FF. The big property trusts were paying from 6 to 9%. Bargain time has come and gone.
And of coarse, anything bought back then would now have 10 or 12 % divs if taken on purchase price.
See ya's.
Yes, but you will need someone to clean your house/pool, serve you at the shops and restaurants, nurse you in the hospital, someone to provide you with those leisure pursuits etc etc.... I'd guess these people won't all be travelling down from Kwinana to work.
Surely the 100's of houses currently U/C in Mandurah aren't all for retirees.
"The banks were paying 6% fully franked divs. Tabcorp was paying 6.7% FF. Qantas was 6% FF. Bluescope was paying 6% FF. The big property trusts were paying from 6 to 9%. Bargain time has come and gone."
given the economic forecasts floating around now i would say bargain time will be in the next 1 to 24 motnhs. mind you if we are in the middle of a global recession i geuss a cheap price tag on a share isnt a bargain - just a reflection of its worth at the time.
given the economic forecasts floating around now i would say bargain time will be in the next 1 to 24 motnhs. mind you if we are in the middle of a global recession i geuss a cheap price tag on a share isnt a bargain - just a reflection of its worth at the time.
Ausprop, a Global recesion hits, shares plunge. OK sure. What the hell do you think will happen to Perth property? Your dreaming if you think it won't plunge too. Perth prices aren't as high as they are because of the views and the sand and the wind and the scrub you know.
Recesion hits and give me some land in Coastal Northern NSW anyday. Mountains, summer rain, clear water streams, real soil.
What economic forecasts are you refering to anyway? All I can see is a world economy that is as healthy as it's ever been, and crying out for stuff to consume. Metals, minerals, energy and food.
See ya's.
Recesion hits and give me some land in Coastal Northern NSW anyday. Mountains, summer rain, clear water streams, real soil.
What economic forecasts are you refering to anyway? All I can see is a world economy that is as healthy as it's ever been, and crying out for stuff to consume. Metals, minerals, energy and food.
See ya's.
I wouldn't say Perth property won't plunge? i think all property would plunge. interest rates then fall and it all starts again. as alexlee pointed out, clear streams and mountains don't equal high property prices. there is nothing particularly aesthetic about Kalgoorlie for example.
the scenario starting with a US housing bust is kicking around all over the place at the moment. I find John Mauldin's updates particularly interesting. i can't see anything healthy about an economy propped up from US consumer spending resulting from inflating property values. real growth in GDP creates wealth, not equity withdrawals against valuations that have run ahead of long term vals.
the scenario starting with a US housing bust is kicking around all over the place at the moment. I find John Mauldin's updates particularly interesting. i can't see anything healthy about an economy propped up from US consumer spending resulting from inflating property values. real growth in GDP creates wealth, not equity withdrawals against valuations that have run ahead of long term vals.
Similar threads
