WA property report

[padraig]

I suspect the WA article above might be based on flawed research. I suspect it does not consider the number of large project builders (e.g. BGC?) who have either stopped taking orders for new homes or are cutting back on new sales to catch up on their backlog. The influx of new well paid professionals is either steady or increasing (e.g. in the oil and gas industry), and many of these may eventually settle here. They will be in the market for new or established homes inside 12 months of arriving here.

I'm confident there's a good two years growth, or more, to come in WA.

Padraig

 

[Kennethkohsg]

There was a resource boom in the early 70's! Japan driven rather than China.

You lucky/smart wa investors should research what happened back then. Could give some clues for when the party stops.

See ya's.

******************************************
Dear Topcropper,

1. Care to share what actually happened after the Japnese-driven boom in the 1970s?

2. I am equally surprised that the median house price for Bunbury has far exceeded that of Perth City, given the local economy size, population size, and city status... I doubt it is sustainable over a long term period and will have to correct some time along the way. The question is when and how will this median house price correction take place? How have it happened in the past?

3. I look forward to be educated by your further sharing please.

4. Thank you.

regards,
Kenneth KOH

 

[Kennethkohsg]

I think WA has just been catching up to eastern states and maybe we will soon find our peak and settle into it..things seem to be still rolling along nicely

REDWING

****************************************88
Dear Redwing,

1. Are there some reliable positive indicators showing this kind of basic fundamental long-term changes in the Perth property market to date?
Care to share with us, your findings?

2. Thank you.

regards,
Kenneth KOH

 

[Ausprop]

many of the millionaires in Perth made their money in the resources boom of the 70's. we are at the beginning of a golden era so dont miss the boat, be it property or a supply industry, professional occupation, whatever.

 

[topcropper]

Hello Kenneth.

I'm not very familiar with the WA property market, I just know that is still booming. I visited last year. Very impressed. Couldn't believe whats happening around Mandurah/Rockingham.

I don't know what happened in the early 70's. I was surprised to find out that Perth property was valued higher than Melbourne in that period, but I pointed out that there was a resource boom then too. That was maybe the reason.

You would have to assume that perhaps Perth property underperformed after the resource boom ended, because Melbourne prices were much higher in the following years. But I don't know this, just guessing.

Like WA property investors, I'll be keeping a close eye on China and the resource boom. The whole Australian economy depends on it.

See ya's.

 

[Rixter]

Did anyone else notice in the latest WA Property Report , areas where the Unit median price is Higher than the house median price.

This in my oppinion as I've mentioned previously is the start of trends to come. - Units out performing houses.

Cheers

 

[<KS>]

Interesting flurry of opinions and articles etc.

1) The WA market is not at all close to declining. Why? As many know I am a manager for Midland Brick (Australia's and the World Largest Brick Manufacturer) and I can tell you we are making 8 million+ bricks/week and most sell before they come out of the Kiln and this past 5 weeks we actually ran out of internals and our most popular face brick - of which we make MASSIVE amounts. Our nearest competitor (Austral) is having to IMPORT internal bricks to even come close to competing and fulfilling its orders.

2) Big builders like Dale Alcock have cut back on taking on clients in order to keep home construction times at under 12 months. (BGC however are still shooting themselves in the foot and are averaging close to 18 months, but I think even they have realised they cannot take on an infinate number of orders).

3) You cant compare Bunbury to Perth. Bunbury is prominantly full of big-ish new houses (4x2's). If you made all Perth housing new it would crush the median price of Bunbury like a bug (land value is a more important factor in this comparison). Also when they say Bunbury is higher - is that on full size houses or does that include apartments etc? If so then Perth has about 100x more apartments which of course are cheaper than your average sized home - in most of WA, let alone Bunbury.

4) Even if the sales of new houses has slowed that reflects on only a small part of the industry. There are a buttload of houses being built but due to population increases and immigration and an increase in overall wealth many people building dont want to sell - they are building their PPOR before prices get out of reach.

From where I sit the biggest risk to WA and Australias housing boom in general is IR. That IMHO is the ONLY thing that can slow it down, and until it is confirmed by those who give the nod that our economy is over powered then there is no need to increase IR, thus no need to panic about property until that arises.

my 2 cents

<KS>

 

[redwing]

Agree regarding the bricks KS, I did a job at Austral some time back and the sales staff showed me what bricks were available to the public..barely a truckfull, all the rest were going to the bigger clients and they work 24/7 presumably as with your brickworks?

REDWING

 

[<KS>]

Thats bang on the money Redwing. Its an unfortunate fact of business that all companies look after thier bread and butter first in our case the BIG builders.

Having said that I deal with dozens of owner builders/year and as long as you're organised you will have no trouble getting bricks atm.

18 months - 2 years ago was a different story - the average waiting time then was 6 months. But this does not mean that we are less busy than we were then, it just means we have worked out what people want and have made our production MUCH more efficient.

<KS>

 

[redwing]

In relation to the data in Property Report published in The West Australian now and then, you may like to analyse it this way -

To determine if a suburb is undervalued you need to compare the 5 year, 12 month & 3 months Growth rates. If a property area is undervalued you will find that the 12 month figure will be underperforming the average 5 year growth rate - Fairly simple really.

If thats the case you know the area will be due to enter a catch up phase in the cycle to bring it back inline again with the 5 year average. This method can be used for established areas.

You may like to check out the following link I posted not too long ago to create your own free historic comparisons as back up homework for your valuations & refinacing purposes -

http://www.somersoft.com/forums/showpost.php?p=174668&postcount=11

Cheers

*BUMP*

Old thread, hows that reportr looking nowadays Rick?

It would be an interesting collation of data, I seem to recall another post that included a speadsheet of REIWA data on SS as well

 

[Rixter]

*BUMP*

Old thread, hows that reportr looking nowadays Rick?

It would be an interesting collation of data, I seem to recall another post that included a speadsheet of REIWA data on SS as well

Hi Redwing,

I haven't purchased in Perth since 2003 so havent collated any data since.

For some one looking to purchase today the methodology is still the same using 5 year, 12 month, 3 month reiwa data for identifying undervalue areas.

As far as historic sales prices go I dont even bother these days when it readily available else. Why reinvent the wheel.