The analysts can't seem to make up their mind. Start of the year it was a bias to easing interest rates now it looks like were going the other way.
Will the WA/Perth Housing Market Bubble Burst?
- Thread starter Kennethkohsg
- Start date
Thanks, Kenneth.
My interpretation on recent statistics - and, importantly, based on my intuitive feeling that the WA economy will be strong for some time yet and there is a still unmet demand for housing. For example, look at the very strong growth in rents now.
For the "average" buyer, house prices have risen to limits of affordability. Housing demands are still unsatisfied; rents are rising strongly. Construction of new houses is lagging demand. House prices will be maintained - rather than fall as happened in eastern states' markets in recent years - and in the next few years there will be modest capital growth and excellent yield growth.
Some areas, such as the Mandurah-Rockingham coastal strip will outperform the general market in coming years as the whole area expands with new housing estates & population following the opening of the new suburban rail link between Mandurah & Perth this year, and the extension of the Kwinana freeway from Perth closer to Mandurah.
I note that I am focussed (biased?) on the Mandurah-Rockingham coastal strip and have purchased houses there.
regards,
My interpretation on recent statistics - and, importantly, based on my intuitive feeling that the WA economy will be strong for some time yet and there is a still unmet demand for housing. For example, look at the very strong growth in rents now.
For the "average" buyer, house prices have risen to limits of affordability. Housing demands are still unsatisfied; rents are rising strongly. Construction of new houses is lagging demand. House prices will be maintained - rather than fall as happened in eastern states' markets in recent years - and in the next few years there will be modest capital growth and excellent yield growth.
Some areas, such as the Mandurah-Rockingham coastal strip will outperform the general market in coming years as the whole area expands with new housing estates & population following the opening of the new suburban rail link between Mandurah & Perth this year, and the extension of the Kwinana freeway from Perth closer to Mandurah.
I note that I am focussed (biased?) on the Mandurah-Rockingham coastal strip and have purchased houses there.
regards,
Dear Pete,
1. While I share the same optimism with you regarding a strong WA State Economy as a result of the recent resource boom continuing to linger on for a few more years and the low local unemployment rate, I am not so positive regarding the absorption of the increased housing supply coming into the local Perth property market and the present high housing approval numbers which is expected to be further increased/to be maintained.
2. With the present housing un-affordaibility problems, continuing un-resolved, and with increased house sale listings and lower sale volume creating amply housing supply in the present Perth property market and with this trend continuing, perhaps we may start to see an "over-supply" situation developing in 2008, whereby a serious market correction can soon be expected in the immediate near future.
3. While I know that housing vacancy rate within the CBD area is extremely tight and low with new tenants in excess, chasing after a very limited supply of inner city housing units, I am not so sure if the same trend is also presently occurring in the outlying suburbs areas as well too.
4. We are also starting to see more land releases and more land being listed as available for sale in the local Perth market, lately.
5. New vacant land release are also coming below A$200,000 per lot mark at the Central Belgravia and Seville Grove land releases as well as at the new developments at Southern River areas.
6. A number of the land releases, such as those at the Somerly and Meve new housing Estates, are also selling off their vacant lands with stamp duties rebates.
7. For your kind update and further comments/discussion , please.
8. Thank you.
regards,
Kenneth KOH
1. While I share the same optimism with you regarding a strong WA State Economy as a result of the recent resource boom continuing to linger on for a few more years and the low local unemployment rate, I am not so positive regarding the absorption of the increased housing supply coming into the local Perth property market and the present high housing approval numbers which is expected to be further increased/to be maintained.
2. With the present housing un-affordaibility problems, continuing un-resolved, and with increased house sale listings and lower sale volume creating amply housing supply in the present Perth property market and with this trend continuing, perhaps we may start to see an "over-supply" situation developing in 2008, whereby a serious market correction can soon be expected in the immediate near future.
3. While I know that housing vacancy rate within the CBD area is extremely tight and low with new tenants in excess, chasing after a very limited supply of inner city housing units, I am not so sure if the same trend is also presently occurring in the outlying suburbs areas as well too.
4. We are also starting to see more land releases and more land being listed as available for sale in the local Perth market, lately.
5. New vacant land release are also coming below A$200,000 per lot mark at the Central Belgravia and Seville Grove land releases as well as at the new developments at Southern River areas.
6. A number of the land releases, such as those at the Somerly and Meve new housing Estates, are also selling off their vacant lands with stamp duties rebates.
7. For your kind update and further comments/discussion , please.
8. Thank you.
regards,
Kenneth KOH
Last edited:
G'day Ken,
Had some time so thought I'd throw my 2 cents in on this discussion and play devils advocate.
Whilst I am seeing more properties coming onto the market across the board, i don't think this is the start of a correction, this is in part a return to normal stock housing levels, in part some dumb state politics and in part some opportunitist profit taking due to federal politics.
The cheaper suburbs are suffering from a lack of first homebuyers due to the State Governments election promises - 1st to *consider* a reduction on stamp duty levels, 2nd to *consider* an increase to the first homebuyer stamp duty threshold, 3rd the state government is offering to low income first homebuyers to take up to $60,000 of their first mortgage - but all of these changes only come into effect for properties bought after July 1st so first homebuyers are staying away till the 1st - i'll tip a mini price spike in the third quarter of cheaper homes.
Alot of the middle priced investor popular suburbs are suffering from a short term oversupply as punters try to cash out of their investment property prior to the 30th of June to take advantage of the Australian superannuation rules that will again change as of the 1st of July.
Double whammy of reduced demand and increased supply, and both are due to either state or federal politics due to expire on the same date - 1st of July. Mark it in your diary.
I am not so sure we have that much newly built properties coming on line from the building sector - my memory whilst hazy does seem to recall that new home approvals have been slowly falling from last years highs, but i do know that the states population is still growing at record levels, we have strong wage growth and an emerging rental boom as demand for housing is still outstripping supply.
Unaffordability, statistically is at all time highs. But housing affordabilty is a statistic derived from the percentage of the average household income devoted to the average house price. Average house prices get updated every 3 months and we have just had a huge boom. Average household incomes are taken from the last census (when was the last one???) which is updated every 3 years. Whilst I imagine their may be some factored in increases inbetween census's in line with long term wage growth averages, but seriously I think WA's average household wage will make jaws drop in the next census such is the strength of the economy.
Increased supply of housing, see responce to Ken's 1st point.
Sales volumne in suburbs I have been working in, have returned to regular if unspectacular levels over the last three months, which is a large increase compared with the last quarter of 2006 when sales volumne did dry up Oct through to December 06.
Vacancy rates are down across the metro area, and rents are rising everywhere.
As the market levels from those heady boom days of last year, the bigger land developing companies are now happy to bring *normal* amounts of their stock onto the market, where as during the boom those bigger companies who had/have the resources/financial capabilities to hold their land would do so, and thereby prices increased even further making profits even bigger. The speed of land price increases last year was breathtaking.
Seville Grove and Southern River are on the outskirts of the perth metro area, a 50 minute peak hour drive to the Perth CBD, in the cheapest transport corridor south west along albany hwy - ie inland away from the coast. I'd suggest that 500sqm blocks should be under $200,000 there.
OK, where is Somerly and Meve? only kidding - I know how to use whereis.com.au So Meve is a sand pit in Beeliar at the southern terminal of the Kwinana Freeway, a 45 to 50 minute drive time to perth in peak hour if you are lucky. And Somerly is so far north the Mitchel Freeway doesn't even go that far.
I also know how to use google so I found the websites for these two estates, and was interested to see the State Governments "Department of Housing & Works" involvement with both estates, and that the stamp duty rebate is only for a limited number of blocks and then the blocks are only being sold to people buying in their own name - ie genuine homebuyers - no "and or nominees" or "trusts" or "pty ltds" can buy the speciallly offered blocks because this is a government subsidy designed to attract genuine homebuyers and not all of us "speculating price gouging property investors".
End of free time, chat soon.
Paulie
Had some time so thought I'd throw my 2 cents in on this discussion and play devils advocate.
Whilst I am seeing more properties coming onto the market across the board, i don't think this is the start of a correction, this is in part a return to normal stock housing levels, in part some dumb state politics and in part some opportunitist profit taking due to federal politics.
The cheaper suburbs are suffering from a lack of first homebuyers due to the State Governments election promises - 1st to *consider* a reduction on stamp duty levels, 2nd to *consider* an increase to the first homebuyer stamp duty threshold, 3rd the state government is offering to low income first homebuyers to take up to $60,000 of their first mortgage - but all of these changes only come into effect for properties bought after July 1st so first homebuyers are staying away till the 1st - i'll tip a mini price spike in the third quarter of cheaper homes.
Alot of the middle priced investor popular suburbs are suffering from a short term oversupply as punters try to cash out of their investment property prior to the 30th of June to take advantage of the Australian superannuation rules that will again change as of the 1st of July.
Double whammy of reduced demand and increased supply, and both are due to either state or federal politics due to expire on the same date - 1st of July. Mark it in your diary.
I am not so sure we have that much newly built properties coming on line from the building sector - my memory whilst hazy does seem to recall that new home approvals have been slowly falling from last years highs, but i do know that the states population is still growing at record levels, we have strong wage growth and an emerging rental boom as demand for housing is still outstripping supply.
Unaffordability, statistically is at all time highs. But housing affordabilty is a statistic derived from the percentage of the average household income devoted to the average house price. Average house prices get updated every 3 months and we have just had a huge boom. Average household incomes are taken from the last census (when was the last one???) which is updated every 3 years. Whilst I imagine their may be some factored in increases inbetween census's in line with long term wage growth averages, but seriously I think WA's average household wage will make jaws drop in the next census such is the strength of the economy.
Increased supply of housing, see responce to Ken's 1st point.
Sales volumne in suburbs I have been working in, have returned to regular if unspectacular levels over the last three months, which is a large increase compared with the last quarter of 2006 when sales volumne did dry up Oct through to December 06.
Vacancy rates are down across the metro area, and rents are rising everywhere.
As the market levels from those heady boom days of last year, the bigger land developing companies are now happy to bring *normal* amounts of their stock onto the market, where as during the boom those bigger companies who had/have the resources/financial capabilities to hold their land would do so, and thereby prices increased even further making profits even bigger. The speed of land price increases last year was breathtaking.
Seville Grove and Southern River are on the outskirts of the perth metro area, a 50 minute peak hour drive to the Perth CBD, in the cheapest transport corridor south west along albany hwy - ie inland away from the coast. I'd suggest that 500sqm blocks should be under $200,000 there.
OK, where is Somerly and Meve? only kidding - I know how to use whereis.com.au So Meve is a sand pit in Beeliar at the southern terminal of the Kwinana Freeway, a 45 to 50 minute drive time to perth in peak hour if you are lucky. And Somerly is so far north the Mitchel Freeway doesn't even go that far.
I also know how to use google so I found the websites for these two estates, and was interested to see the State Governments "Department of Housing & Works" involvement with both estates, and that the stamp duty rebate is only for a limited number of blocks and then the blocks are only being sold to people buying in their own name - ie genuine homebuyers - no "and or nominees" or "trusts" or "pty ltds" can buy the speciallly offered blocks because this is a government subsidy designed to attract genuine homebuyers and not all of us "speculating price gouging property investors".
End of free time, chat soon.
Paulie
I disagree.
Affordability is not being addressed.
Extending a loan to 40 or 50 yrs simply masks the problem.
Affordability will not be addressed till the cost for property comes DOWN.
It requires a complete change of perspective on the way we view housing and home ownership.
Its time for that change and I believe its coming.
If you can break down the property into two components being the land and the dwelling, then realistically all you need for shelter is the dwelling.
The ownership or tenure of the land is less important.
The cost of the dwelling is from $150k to $300k.
Rent the land or pay a share for the lease of it.
Instead of trying to predict which suburb or state is going to grow the best, think outside the box and look at the type of households that will be required for the future.
Tap this demand and you will have ongoing success with your property investing despite what the market is doing
In fact it will be the next boom in real estate .... tapping that change.
The Westpac property report hints at the changing household types.
There are developers who have already tapped a changing model with success in Australia.
It hasn't quite taken off in WA yet but it is coming.
KEvin
Affordability is not being addressed.
Extending a loan to 40 or 50 yrs simply masks the problem.
Affordability will not be addressed till the cost for property comes DOWN.
It requires a complete change of perspective on the way we view housing and home ownership.
Its time for that change and I believe its coming.
If you can break down the property into two components being the land and the dwelling, then realistically all you need for shelter is the dwelling.
The ownership or tenure of the land is less important.
The cost of the dwelling is from $150k to $300k.
Rent the land or pay a share for the lease of it.
Instead of trying to predict which suburb or state is going to grow the best, think outside the box and look at the type of households that will be required for the future.
Tap this demand and you will have ongoing success with your property investing despite what the market is doing
In fact it will be the next boom in real estate .... tapping that change.
The Westpac property report hints at the changing household types.
There are developers who have already tapped a changing model with success in Australia.
It hasn't quite taken off in WA yet but it is coming.
KEvin
in answer to the heading of this thread, seems the answer is no
http://www.theaustralian.news.com.au/story/0,20867,21508332-2702,00.html
http://www.theaustralian.news.com.au/story/0,20867,21508332-2702,00.html
Dear Ausprop,
1. My tentative response to this thread, at this point in time, is to "not yet... to be further seen as the Perth property market further unfolds itself in 2008 and 2009."
2. This is especially so, when developers start to give steep price discounts to their new buyers such that those being advertised over this weekend newspapers.
3. For example, down at Port Bouvard Estate, the land price for the Stage 6 land release at Southport area has been reduced by A$200,000 from $600,000 to $400,000 and canal land lots being reduced from $1.3 million to $950,000.
4. Furthermore with median land price in Perth Metropolitan area last reported to be A$265,000 as at 31st Dec 2006, we are also beginning to see more cheaper land being marketed in the present Perth property market such as those presently being marketed between $170,000-$190,000 at Windsor Hills Estate and between A$155,000 -$175,000 at the Central Belgravia Estate in Kwinana, by the Satterley Property Group.
5. Lordcorp is also known to be marketing vacant land for $180,000 at Seville Grove in Armadale while in Baldivis, selling price for the new land release at Baldivis Central and at RiverGum Estates are being marketed as from below $200,000 price mark now.
6. Already, there has been some 3 fold increase in the number of house sale listings from 3200-3800 in Apr-June 2006 period to 13,800 by March 2007 within the Perth Metropolitan Region and with average length of time taken to sell a house increasing to some 90 days recently.
7. Subject to further confirmation, there has also been some previous reports, projecting of the vacant lands and properties "over-supply" situation developing within the Perth Property market from 2008-2009 onwards, based on the present new housing approvals and its underlying housing demand in Perth.
8. This is not withstanding the local strong WA State Economy continuing over the next few years with low unemployment rate, skill labour shortage and the resource boom continuing.
9. For your kind update and further comments/discussion, please.
10. Thank you.
Cheers,
Kenneth KOH
1. My tentative response to this thread, at this point in time, is to "not yet... to be further seen as the Perth property market further unfolds itself in 2008 and 2009."
2. This is especially so, when developers start to give steep price discounts to their new buyers such that those being advertised over this weekend newspapers.
3. For example, down at Port Bouvard Estate, the land price for the Stage 6 land release at Southport area has been reduced by A$200,000 from $600,000 to $400,000 and canal land lots being reduced from $1.3 million to $950,000.
4. Furthermore with median land price in Perth Metropolitan area last reported to be A$265,000 as at 31st Dec 2006, we are also beginning to see more cheaper land being marketed in the present Perth property market such as those presently being marketed between $170,000-$190,000 at Windsor Hills Estate and between A$155,000 -$175,000 at the Central Belgravia Estate in Kwinana, by the Satterley Property Group.
5. Lordcorp is also known to be marketing vacant land for $180,000 at Seville Grove in Armadale while in Baldivis, selling price for the new land release at Baldivis Central and at RiverGum Estates are being marketed as from below $200,000 price mark now.
6. Already, there has been some 3 fold increase in the number of house sale listings from 3200-3800 in Apr-June 2006 period to 13,800 by March 2007 within the Perth Metropolitan Region and with average length of time taken to sell a house increasing to some 90 days recently.
7. Subject to further confirmation, there has also been some previous reports, projecting of the vacant lands and properties "over-supply" situation developing within the Perth Property market from 2008-2009 onwards, based on the present new housing approvals and its underlying housing demand in Perth.
8. This is not withstanding the local strong WA State Economy continuing over the next few years with low unemployment rate, skill labour shortage and the resource boom continuing.
9. For your kind update and further comments/discussion, please.
10. Thank you.
Cheers,
Kenneth KOH
The Perth topic seem to be off the boil at the moment probably because no one is that sure what's happening. Not only is it 2 tiered but even the average property seems like it's all over the place depending on where you look or what you read. 
Some recent (contradictory?) news links on the topic for those who haven't seen them.
Perth cements spot as Australia's priciest city
and then again... Property millions go east
Cheers,
Beef.
Some recent (contradictory?) news links on the topic for those who haven't seen them.
Perth cements spot as Australia's priciest city
and then again... Property millions go east
Cheers,
Beef.
The topic is having a breather like the Perth market.
I don't think its over yet.
Where do you go if you leave WA // Over the Qld ?
The have their own problems over there which make ours look like pimples and not mountains.
Check this out as a letter to a newspaper by a buddy of mine:
Subject: How smart can Beattie and Bligh be to make Queensland go backwards?
What a mess!
Everyone in Queensland is paying the price of the lethargic Government that is so busy self-promoting, playing “catch up”, and throwing massive amounts of tax payers’ money at problems that should not exist.
Why? Because, there’s no vision from the Premier and his side kicks. ZERO. NONE. NOT A BIT.
A blind man could have seen that the infrastructure problems that are plaguing Queensland now, were coming. Ummmmmm – how hard is it? Decades of population growth, shifts in Australia’s demography, the ‘baby boomer’ effect and emerging resources demand. So, what is the best thing to do for the past 10 years? Put plenty of money away for a rainy day (but we never get them any more either) and then brag about the States’ budget surplus!!! Awesome!
If you ‘throw money’ at a problem to fix it, you generally get a less than optimum outcome that cost more than if there was a plan with some insight in the first place. It looks like we are going to have to be satisfied with expensive compromises and missed opportunities in Queensland for generations to come.
The Smart State score card is appalling;
The worst health system in Australia. And, even now, despite spending millions to recruit new doctors, the actual numbers of recruits has fallen for consecutive years.
A failing road system. The Gateway Arterial problem is a disgrace – solution coming in 2011 – not good enough.
Inadequate transport systems – new trains that do not fit through the tunnels and therefore have to be delayed from starting service.
No new dams in 20 years. Now a water grid is urgently needed and they are throwing an EXTRA $130 million at the problem to get it finished before there is no water.
Power stations that have to reduce their output because there is no water – thankfully there was not a hot summer with big peak demand on the power grid leading to blackouts again!
In some regional areas it takes over a year for the Government owned Ergon Energy to connect the power to a new project.
And, here is the best one yet! Coal!
During the resources boom, the actual coal exports from Queensland have fallen because the Government-owned – Queensland Rail – cannot deliver! The biggest clients of the industry have told Beattie and Bligh about this and are waiting for an answer. Beattie has been ‘swanning’ in Korea to promote the ‘Smart State’ – why? Why bother making more promises that cannot be kept and create more clients that eventually turn away in frustration because they cannot get past the bungling of this Government?
It is frustrating and a disgrace to learn that Western Australia will be the first Australian State to have a ‘clean coal’ power station. Queensland is the biggest coal exporter yet, I guess the wise people at Rio Tinto and BP decided that in WA they may be able to get some coal to put into the power plant due to the unreliability of Queensland.
Our State and the performance of our people are being measured on a World stage. And, based on the views of Mr. K.T. Lee, CEO of Korea’s giant steel producer POSCO, then we are being scored below China, Indonesia, Russia and Canada. How smart is that?
This is not good enough! Bligh and Beattie have to stop the political meandering and face reality.That reality is very honest – they have failed the people of Queensland miserably. The PR machine will not be able to cover this up for much longer.
Jobs will be lost during an economic peak due to Queensland losing valuable clients and contracts to more reliable producers that have moved past bungling Governments full of promise and with dismal performance.
Get on with it. Make some hard decisions (get off the fence to do it) and fast track some private enterprise management of some of these big, immediate problems. The iron ore producers in WA do not have the train problems that will lead to the missed opportunity of our generation.
xxxx xxxxx
Main Beach
Queensland
I don't think its over yet.
Where do you go if you leave WA // Over the Qld ?
The have their own problems over there which make ours look like pimples and not mountains.
Check this out as a letter to a newspaper by a buddy of mine:
Subject: How smart can Beattie and Bligh be to make Queensland go backwards?
What a mess!
Everyone in Queensland is paying the price of the lethargic Government that is so busy self-promoting, playing “catch up”, and throwing massive amounts of tax payers’ money at problems that should not exist.
Why? Because, there’s no vision from the Premier and his side kicks. ZERO. NONE. NOT A BIT.
A blind man could have seen that the infrastructure problems that are plaguing Queensland now, were coming. Ummmmmm – how hard is it? Decades of population growth, shifts in Australia’s demography, the ‘baby boomer’ effect and emerging resources demand. So, what is the best thing to do for the past 10 years? Put plenty of money away for a rainy day (but we never get them any more either) and then brag about the States’ budget surplus!!! Awesome!
If you ‘throw money’ at a problem to fix it, you generally get a less than optimum outcome that cost more than if there was a plan with some insight in the first place. It looks like we are going to have to be satisfied with expensive compromises and missed opportunities in Queensland for generations to come.
The Smart State score card is appalling;
The worst health system in Australia. And, even now, despite spending millions to recruit new doctors, the actual numbers of recruits has fallen for consecutive years.
A failing road system. The Gateway Arterial problem is a disgrace – solution coming in 2011 – not good enough.
Inadequate transport systems – new trains that do not fit through the tunnels and therefore have to be delayed from starting service.
No new dams in 20 years. Now a water grid is urgently needed and they are throwing an EXTRA $130 million at the problem to get it finished before there is no water.
Power stations that have to reduce their output because there is no water – thankfully there was not a hot summer with big peak demand on the power grid leading to blackouts again!
In some regional areas it takes over a year for the Government owned Ergon Energy to connect the power to a new project.
And, here is the best one yet! Coal!
During the resources boom, the actual coal exports from Queensland have fallen because the Government-owned – Queensland Rail – cannot deliver! The biggest clients of the industry have told Beattie and Bligh about this and are waiting for an answer. Beattie has been ‘swanning’ in Korea to promote the ‘Smart State’ – why? Why bother making more promises that cannot be kept and create more clients that eventually turn away in frustration because they cannot get past the bungling of this Government?
It is frustrating and a disgrace to learn that Western Australia will be the first Australian State to have a ‘clean coal’ power station. Queensland is the biggest coal exporter yet, I guess the wise people at Rio Tinto and BP decided that in WA they may be able to get some coal to put into the power plant due to the unreliability of Queensland.
Our State and the performance of our people are being measured on a World stage. And, based on the views of Mr. K.T. Lee, CEO of Korea’s giant steel producer POSCO, then we are being scored below China, Indonesia, Russia and Canada. How smart is that?
This is not good enough! Bligh and Beattie have to stop the political meandering and face reality.That reality is very honest – they have failed the people of Queensland miserably. The PR machine will not be able to cover this up for much longer.
Jobs will be lost during an economic peak due to Queensland losing valuable clients and contracts to more reliable producers that have moved past bungling Governments full of promise and with dismal performance.
Get on with it. Make some hard decisions (get off the fence to do it) and fast track some private enterprise management of some of these big, immediate problems. The iron ore producers in WA do not have the train problems that will lead to the missed opportunity of our generation.
xxxx xxxxx
Main Beach
Queensland
Hi,
Perth thread hasn't been added to for a few months. Just wanting to see what others are thinking about the market at the moment. I think it is still quite flat. There was alot of hype and over inflated prices in suburbs close to where the rail line was going and I am now seeing drops in these areas. Whoever designed the Rockingham station to be nowhere actually near the centre of Rockingham needs to be evaluated. Perhaps there is another station in Rockingham that I haven't seen. The stations seem to be well positioned in Kwinana but nowhere else. Really odd. Guess people will have to rely on buses to get them from the train stations. Wonder how good the bus system is and how long you will have to wait for one. Sorry, just my rant. As you can tell, I am umimpressed with the way the train line has been developed.
Lucy
Perth thread hasn't been added to for a few months. Just wanting to see what others are thinking about the market at the moment. I think it is still quite flat. There was alot of hype and over inflated prices in suburbs close to where the rail line was going and I am now seeing drops in these areas. Whoever designed the Rockingham station to be nowhere actually near the centre of Rockingham needs to be evaluated. Perhaps there is another station in Rockingham that I haven't seen. The stations seem to be well positioned in Kwinana but nowhere else. Really odd. Guess people will have to rely on buses to get them from the train stations. Wonder how good the bus system is and how long you will have to wait for one. Sorry, just my rant. As you can tell, I am umimpressed with the way the train line has been developed.
Lucy
WHEN the trains start to run is the bigger question. It just keep getting delayed.
In the Mandurah area l am noticing a drop in house prices.There is also a lot more adds with Must Sell, Owner will look at all offers etc etc.
I have seen a drop of prices in a lot of areas of 20k to 30k.
The yeilds are still bad and there is a big supply of rentals available now.
I think it will be awhile before this improves.
Around the new Marina there is plenty of Mill$ plus units to choose from. As more and more are completed each week/month l can see there being a huge over supply there for awhile to come.
Its hard to justify buying another ip in this area at the moment. The figures just dont stack up. I am quite sure the CG will still be around the 10 maybe 15% for the next 12 months in some areas.
I did find a 4 pack that was returning 5.7% with very good prospects for adding value. However l wasnt quick enough. Back to fishing.
Oh well thats my thoughts on the market.
cheers
yadreamin
In the Mandurah area l am noticing a drop in house prices.There is also a lot more adds with Must Sell, Owner will look at all offers etc etc.
I have seen a drop of prices in a lot of areas of 20k to 30k.
The yeilds are still bad and there is a big supply of rentals available now.
I think it will be awhile before this improves.
Around the new Marina there is plenty of Mill$ plus units to choose from. As more and more are completed each week/month l can see there being a huge over supply there for awhile to come.
Its hard to justify buying another ip in this area at the moment. The figures just dont stack up. I am quite sure the CG will still be around the 10 maybe 15% for the next 12 months in some areas.
I did find a 4 pack that was returning 5.7% with very good prospects for adding value. However l wasnt quick enough. Back to fishing.
Oh well thats my thoughts on the market.
cheers
yadreamin
yeh if I didn't desire to live inner city so much, one of those new apartments in the Marina would be a great place to rent as a new home. There is certainly no 'rental crisis' in the mandurah area. Actually there is... it's for me as landlord. Can't get $240 a week for a $400k near new villa.
I think there is an oversupply at the moment and buyers have many choices, rents in Mandurah area are also very poor and I am sick of reading those articles about rents soaring.
Funny though I have a friend who is still purchasing blocks in Meadow Springs L&H packages, she is an ex- RE agent and believes she can still make $50K equity on completion of each home. I really cant see it as there is so much stuff on the market, 12-18 months ago a different scenario.
On the flip side inner city properties I believe still going strong, demand for older/period properties within 5km city. I have been watching this market closely and just keeps going up.
Funny though I have a friend who is still purchasing blocks in Meadow Springs L&H packages, she is an ex- RE agent and believes she can still make $50K equity on completion of each home. I really cant see it as there is so much stuff on the market, 12-18 months ago a different scenario.
On the flip side inner city properties I believe still going strong, demand for older/period properties within 5km city. I have been watching this market closely and just keeps going up.
"believes she can still make $50K equity on completion of each home"
hardly seems worth the effort - you have to either hold it and get minimal rent return and hammer your cash flow, or sell it and pay $5k GST and another $15 or 20 in tax... leaving you with the grand sum of of about $25k. not much room for error there!
hardly seems worth the effort - you have to either hold it and get minimal rent return and hammer your cash flow, or sell it and pay $5k GST and another $15 or 20 in tax... leaving you with the grand sum of of about $25k. not much room for error there!
WHEN the trains start to run is the bigger question. It just keep getting delayed.
In the Mandurah area l am noticing a drop in house prices.There is also a lot more adds with Must Sell, Owner will look at all offers etc etc.
I have seen a drop of prices in a lot of areas of 20k to 30k.
The yeilds are still bad and there is a big supply of rentals available now.
I think it will be awhile before this improves.
Around the new Marina there is plenty of Mill$ plus units to choose from. As more and more are completed each week/month l can see there being a huge over supply there for awhile to come.
Its hard to justify buying another ip in this area at the moment. The figures just dont stack up. I am quite sure the CG will still be around the 10 maybe 15% for the next 12 months in some areas.
I did find a 4 pack that was returning 5.7% with very good prospects for adding value. However l wasnt quick enough. Back to fishing.
Oh well thats my thoughts on the market.
cheers
yadreamin
yay! just secured $235pw for my $400k villa. now to pay back the 2 weeks letting fee from the PM, then the GST thereon, then the $700 water bill I just paid, next will be rates. Come christmas time I may start to see some money in my account!
Xmas...ha !! No chance....you'll have the Land Tax bill, then the insurance to pay, then there'll be a bunch of maintenance and little "come and fix" things with a new set of tenants, not to mention the accumulating PM fees whilst all of that is being paid. By about March you might be in the clear, and just about able to forward some of the rent towards the mortgage when the HWS will sh*t itself and strip a further month or two away.
By then of course, it'll be time for the water rates bill to arrive again.
Now, stop whinging and get on with it....just think of the bigger picture.....and remember, rental rates are at an all time high and the renters are looking for some sort of relief.
Make sure you buy your tenants a box of chocolates and some wine, that'll ensure your 3.05% gross yield is protected....heaven knows what'll happen to your magnificent cashflows if they ever threaten to leave. What's your net yield by the way after holding costs other than interest on the loan ?? Is it negative ??
nah it's not that bad, the hot water has sh@t itself already this year, the $1000 insurance bill was paid last month. The old leaking roof has raised its ugly head tho. so now it's fingers crossed that we don't get the proverbial blocked toilet or tenant wants something for nothing routine. oops probly jinxed it... there's no alarm in that place!
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