Hi Guys,
It's been a while since i posted so i thought i'd just relay for you what seems to be taking place in Perth at the moment both in RE and New Builds.
The RE sector is mixed with some agents saying the first quarter is really positive with properties starting to move after having a significant lull in the last quarter of 2010. Perth market was flooded with excess properties being listed well above the average listing amounts. A lot of agents were struggling to get buyers and conditional offers were linking 1,2,3 then the last offer would fall due to no sale so all linked sales were falling.
This effect exacerbated the RE figures that were being released in that there were buyers, but the conditional sales and banks tight lending impacted the market significantly.
Atleast some RE agents are positive at the moment and on several fronts i'm hearing movement.
For those that are wondering about our 2 speed economy, I, and many like me aren't seeing 2 speeds at all, it seems to be one speed. I think it's a result of the mining boom trickle effect not reaching our city as much as it did last time and it may still be another 12 months away before it kicks in (if it ever does). FIFO workers are not relocating to Perth as much as before according to Atlas Iron Director David Flanagan - who might be a small fish but at least he's an accessible fish
From the new home building front theres stagnation in the lower end of the market with some builders recently handing out redundancies. This week i heard Plunkett let 4 people go and I know many sales reps in that field are struggling. Even the 7.5% discount offered by Dale Alcock isn't having much effect on sales and every other company is throwing packages at clients with little to no bites.
The one new home building sector that IS moving right now is the cheaper 2 storey market with a lot of interest in the $300,000 mark (and lower if possible). From my own perspective this is a difficult market to enter as the quality level of these homes is really poor and not what most people expect. I think there will be a lot of disgruntled clients in 12 months when they move in and find they have cheap fixtures and fittings that are found in first home owners houses worth $125000.
From the luxury end, a few builders have signed $1M+ contracts and new designs are starting to come online again. These jobs however don't hit the ground for 9-12 months so the impact on the construction sector is still way off.
Rumours of a new FHOG abound and with the ABN group essentially championing the HIA now days there's a good push with government to throw some stimulus in.
All in all, Perth feels poised to tick along slowly for the next 6 months with little to no impact felt by the mining sector. I don't see much changing in that time.
What does all this mean from an investors point of view? Property in Perth is definately a buyers market still - either established or new builders are great. Lots of potential with sellers willing to negotiate. Building times are right down and prices are ultra-competitive. (From my perspective as a buiding broker that's what I do day in and day out and prices coming back from builders are lean).
It's been a while since i posted so i thought i'd just relay for you what seems to be taking place in Perth at the moment both in RE and New Builds.
The RE sector is mixed with some agents saying the first quarter is really positive with properties starting to move after having a significant lull in the last quarter of 2010. Perth market was flooded with excess properties being listed well above the average listing amounts. A lot of agents were struggling to get buyers and conditional offers were linking 1,2,3 then the last offer would fall due to no sale so all linked sales were falling.
This effect exacerbated the RE figures that were being released in that there were buyers, but the conditional sales and banks tight lending impacted the market significantly.
Atleast some RE agents are positive at the moment and on several fronts i'm hearing movement.
For those that are wondering about our 2 speed economy, I, and many like me aren't seeing 2 speeds at all, it seems to be one speed. I think it's a result of the mining boom trickle effect not reaching our city as much as it did last time and it may still be another 12 months away before it kicks in (if it ever does). FIFO workers are not relocating to Perth as much as before according to Atlas Iron Director David Flanagan - who might be a small fish but at least he's an accessible fish
From the new home building front theres stagnation in the lower end of the market with some builders recently handing out redundancies. This week i heard Plunkett let 4 people go and I know many sales reps in that field are struggling. Even the 7.5% discount offered by Dale Alcock isn't having much effect on sales and every other company is throwing packages at clients with little to no bites.
The one new home building sector that IS moving right now is the cheaper 2 storey market with a lot of interest in the $300,000 mark (and lower if possible). From my own perspective this is a difficult market to enter as the quality level of these homes is really poor and not what most people expect. I think there will be a lot of disgruntled clients in 12 months when they move in and find they have cheap fixtures and fittings that are found in first home owners houses worth $125000.
From the luxury end, a few builders have signed $1M+ contracts and new designs are starting to come online again. These jobs however don't hit the ground for 9-12 months so the impact on the construction sector is still way off.
Rumours of a new FHOG abound and with the ABN group essentially championing the HIA now days there's a good push with government to throw some stimulus in.
All in all, Perth feels poised to tick along slowly for the next 6 months with little to no impact felt by the mining sector. I don't see much changing in that time.
What does all this mean from an investors point of view? Property in Perth is definately a buyers market still - either established or new builders are great. Lots of potential with sellers willing to negotiate. Building times are right down and prices are ultra-competitive. (From my perspective as a buiding broker that's what I do day in and day out and prices coming back from builders are lean).
