WA - are you ready...?

[Aaron Sice]

we've got no idea whether it's going up, down or sideways.

invest to suit your long term trend. i would only say you need your head read if you're going headstrong into a flipping venture.

 

[DeanoC]

Keen to get a better understanding of why you believe we are seeing the price drops Aaron. You were one of the most ardent believers in a housing shortage if I am not mistaken

This might make for an interesting thread

 

[recruit2]

we've got no idea whether it's going up, down or sideways.

invest to suit your long term trend. i would only say you need your head read if you're going headstrong into a flipping venture.

But I would have said that anyway regardless of the market Flipping is dodgy.

 

[Ausprop]

They are talking 10% drops as a minimum next year

who said that out of curiosity?

 

[Ausprop]

But I would have said that anyway regardless of the market Flipping is dodgy.

we are all flippers in the fullness of time

 

[Aaron Sice]

Keen to get a better understanding of why you believe we are seeing the price drops Aaron. You were one of the most ardent believers in a housing shortage if I am not mistaken

This might make for an interesting thread

that's right i was - no need to break out the accusations. i'm WA centric remember, this is the Saudi of the South.

i still believe we are undersupplied for good housing. there's always a market for dogboxes, but in the "money" states for a majority of renters, it just won't cut it.

what does this mean?

it means people still have the luxury of turning their noses up at anything they don't like and while they do that, dogboxes will remain empty and new 3x2s will rent for a premium. regardless of supply...where do you place your money when buying a PPOR or IP?

the immigration figures are skewed and i was really disappointed to learn this. but i've been an advocate of the above for a long time, outside of the immigration debate.

so i believe that unless James Price Point, Pluto, Collie and Newmont really take off and push wages up to that $150k bracket, Perth will be a floater for a while yet.

but then, my beachside property has grown in value by about $100k on a recent valuation. work that out....

 

[Ausprop]

word has it that top end beach houses in dunsborough and luxury boats are moving. People at the top of the food chain are starting to do ok

 

[MrCrumbpacker]

http://globaleconomicanalysis.blogspot.com/2011/01/australias-tulip-mania-about-to-crash.html

Gulp!.......didn't Louis Christopher used to be bullish?

 

[bene313]

http://globaleconomicanalysis.blogspot.com/2011/01/australias-tulip-mania-about-to-crash.html

Bearish indeed! However I wonder if such increases in listings will lead to:

1. Collapse in prices as touted by the article, or,

2. Stalling or slight falls in prices, accompanied by increasing rents, thereby over time (perhaps many years) restoring some market equilibrium.

I would say (2) is more logical and more likely.

Is it that unusual that certain areas in Australia are presenting characteristics of an emerging buyers market? Or would the existence of a buyers market not be part of a regular and periodic cycle in property..?

 

[Aaron Sice]

agreed - in fact, i've been touting (2) since 2007.

 

[MrCrumbpacker]

In my experience, rents only go up if wages go up, and the way retail is performing at the moment, its down to mining.

 

[Ausprop]

Mining is going off in a big way. I think the difference in the speed of the 2 speed economy will be more amplified than last time. Boom 2.0 is taking place whilst the rest of the economy is in the doldrums. That's why the article by that bloke above seems to be more apt for the melbourne / sydney market, which i think experienced some capital growth over the last couple of years (probably on the back of a speculative wave)

 

[MrCrumbpacker]

The title of the article is a bit misleading, intentionally or not it links 'Property', 'Crash', and '44%' in the one heading, when it is talking about less severe possible drops in property prices.

 

[Steve Fitz]

Ausprop you say Mining is going off in a big way, but in Perth we're yet to experience the trickle down effect like we did 4 years ago. It may take a bit more time but i think there are a number of factors here worth considering - and Aaron Sice may have more info to back these up;

1. Less people are migrating to Perth than previously. They are happy to FIFO from the east more so than they were 5 years ago, perhaps it's the Perth property prices that give less incentive to relocate. Over Christmas I was speaking to David Flanagan from Atlas who said he had equal share of staff flying from all over Australia.

2. It's a buyers market in Perth with up to 17,000 homes for sale, way over the average 14,000. I don't believe the property shortage is real, at least not at the moment. In 3 to 4 years though we're likely to experience another land shortage as new projects are being held up by the banks.

3. The physical retail sector is suffering as a result of globalisation and their slow reaction to change and capture market share. It's as simple as that. Online retail is going great.

 

[Ausprop]

agree with most points. FIFO... we find it generally too hard to bring guys in from over east even tho a couple have asked to do it. There is a shortage of workers here already, as prices is set at the margin I expect there to be some pressure here pretty quickly. At this stage most of the money is the big players striking their fortune tho and is yet to trickle as you say. there is an oversupply but if we index the 14000 up each year, its not dramatic. Re the land shortage, we need the market to indicate there is a shortage - no sign of that as yet. Prices in plaes like madora bay and singleton are back to where they were 5 years ago. retail - yes a dead industry, everyone needs to move on.

 

[yadreamin]

I just put my Mandurah ip up by $20 p/w had not trouble finding tenant actually had quite a few apply. This should help keep the wolf from the door a bit longer.
I have also thrown my hat in the ring to try and score a mine site job.
My mate who is a rigger said companies are actively moving to secure their good staff as its feared a lot of poaching is starting to take place due to shortages starting to appear with staff.
I know its very difficult to get a tradies around this area and this is going to only get worse.


My gut feeling though if the RBA put rates up within the next 6 months with the current disasters then we will see far too many people/families go to the wall. Pain is starting to show just with the cost of living.
cheers
yadreamin

 

[tom32]

1. Less people are migrating to Perth than previously. They are happy to FIFO from the east more so than they were 5 years ago, perhaps it's the Perth property prices that give less incentive to relocate. Over Christmas I was speaking to David Flanagan from Atlas who said he had equal share of staff flying from all over Australia.

I am a scummy east coaster who moved to Perth.

I am so glad I did. Rents are cheaper for comparable properties especially for family homes. I recently had a midlife reassessment of where I was at and applied for jobs back east to move "home". By the time I worked out what I would be paying for a shitbox in Sydney I soon worked out Perth represented pretty good value for a family.

Apart from for short term assignments I would recommend anyone move their family to Perth. It truly is a ripper of a city and I have lived in nearly all of them.

On your general premise though I agree. We have about a third of our fly in fly out people coming from places other than Perth. All the overseas migrants however go via Perth and this is a large component at the moment and I expect as things really come to a crunch more will come via overseas.

In my opinion perhaps it is the liberal state government or other things but I think the issue for Perth prices is we finally have a state government who is truly working toward affordable housing and have been for the last 12 months (not so good if you own some). Certainly in the SW they are releasing land and developing their own at high rates and continue to do so even in the face of developers slowing down.

At the end of the day whether you have 1 million residents or 1 move into town the price of all properties will come back to the marginal out turn cost. If you have urban consolidation policies like in Sydney expect prices to always trend at the maximum affordability but I don't see this for Perth for the next few years.

 

[crazyhorselady]

I work in mining and was chatting with a workmate the other day. He has no mortgage on his property and put it on the market a few weeks before xmas. I asked him why and he said they wanted to upgrade while property is so cheap, but wanted to sell his house before buying another(????) I wonder if others in the market have this sentiment, as I am astounded at the amount of property for sale ATM.
IMHO now is a very good time to buy in Perth, and although I do believe the market will be flat for the first part of the year I think we will experience another rise in the near future based on the resources boom.
Considering what I am about to purchase I sure as hell hope I'm right!

 

[bene313]

IMHO now is a very good time to buy in Perth

In 6 months it could be an even better time to buy, but who knows. With such uncertainty in the market at the moment, holding costs would be my number one concern.

 

[Steve Fitz]

Not only is Perth a good place to buy established but it hasn't been this good to build for a long time. Construction timeframes are really low and availability of suppliers and trades hasn't been better for possibly 10 years.