This weekend I got warned off property by someone who invested once. They have had over $150,000 capital growth but are very negative about the expenses related to holding property. I am wondering why investors would bother with WA at the moment with high prices and low rent returns. I for one, am looking at NSW and Qld at the moment.
Will the WA/Perth Housing Market Bubble Burst?
- Thread starter Kennethkohsg
- Start date
I think it's the promise - or hope - of higher returns to come, both rental and cap growth. with the highest economic and population growth I am not sure why you would want to invest other than in WA but you can't pick any old property and think 'oh well look at what is happening around me this will all be roses'
With such a high level of properties on the market as well, it gives buyers the opportunity to negotiate on price, something that has not been possible over the last few years, generally.
With this and the things that Ausprop and Alanna have pointed out, I also think WA is still a good option, which is why we are still out there looking to buy.
With this and the things that Ausprop and Alanna have pointed out, I also think WA is still a good option, which is why we are still out there looking to buy.
Ausprop, There should not be a letting fee. Its no longer allowed in WA.
I am pleased to hear you got a tenant though.
Hi Alanna, yes l do agree that you can pick up returns like 8% but as our lenders are "postcode sensitive" we dont have the option of some of those areas.
I do look very hard, believe me.
cheers yadreamin
I believe you are mistaking the 1 week letting fee charged to the tenant that was abolished because the poor dears couldn't afford it.
There was no such relief for the hapless Landlord. The Agent still charges them at elast 2 weeks letting fee.
Yes, I see where you are coming from, we used to have dealings with one such lender. I have now stopped giving them quite so much information...
It's often the very process of looking that can be the most draining. I have only bought one property this year and I am getting a bit sick of all of the searching so my efforts are becoming more sporadic in the search!
Cheers
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 ??
For those who are still buying in WA do you think my estimate of CG being 10 to 15% is a bit far fetched?
I am mainly focusing on beach suburbs in Mandurah.
jeez the yeild sucks down here.
I have found good solid homes, easily rentable, very very good locations, reduced asking prices with eager vendors and the best l can come up with is about 3% gross yeild. I know the figures say walk away but i also have this other little voice in the head saying buy it now and carry the loss it will be worth it. If my CG prediction is about right the the property would still give me about 35k per year in growth after the holding losses.[no calcs for tax have been added in yet]
what do l do?
cheers yadreamin
ps feel free to get the crystal ball out
I am mainly focusing on beach suburbs in Mandurah.
jeez the yeild sucks down here.
I have found good solid homes, easily rentable, very very good locations, reduced asking prices with eager vendors and the best l can come up with is about 3% gross yeild. I know the figures say walk away but i also have this other little voice in the head saying buy it now and carry the loss it will be worth it. If my CG prediction is about right the the property would still give me about 35k per year in growth after the holding losses.[no calcs for tax have been added in yet]
what do l do?
cheers yadreamin
ps feel free to get the crystal ball out
Dear Yadreamin,
1. I have been following the Western Australian weekend newspapers classified advertisements for the past few months.
2. It seems to me that the Mandurah suburb has been maintaining the highest number of house sale listings classified advertisements for the last 4 weeks or so already.
3. While I remain optimistic of the Mandurah suburb's capital growth on a long term basis, I am expecting to see some immediate short-term "pains" and house price decline, given that there has been "excessive" speculation in the particular suburb during the last 1-2 years or so.
4. With the Port Bouvard land developer openly giving some A$300,000 price discounts on their clearance sales on the canal land blocks some 2 months ago, some land speculators would be truly badly burnt if they are unable to hold on to their canal lands, during this market correction period.
5. I notice that some canal land blocks are now being advertised as selling below A$700,000 in yesterday newspapers. They were known to be asking for more than A$850,000 last year.
5. Consequently, I believe that we are seeing the early signs of these short term pains for this Mandurah suburb before its long term capital growth would start to recover again in the medium term.
6. For your kind update and further comments/discussion, please.
7. Thank you.
regards,
Kenneth KOH
1. I have been following the Western Australian weekend newspapers classified advertisements for the past few months.
2. It seems to me that the Mandurah suburb has been maintaining the highest number of house sale listings classified advertisements for the last 4 weeks or so already.
3. While I remain optimistic of the Mandurah suburb's capital growth on a long term basis, I am expecting to see some immediate short-term "pains" and house price decline, given that there has been "excessive" speculation in the particular suburb during the last 1-2 years or so.
4. With the Port Bouvard land developer openly giving some A$300,000 price discounts on their clearance sales on the canal land blocks some 2 months ago, some land speculators would be truly badly burnt if they are unable to hold on to their canal lands, during this market correction period.
5. I notice that some canal land blocks are now being advertised as selling below A$700,000 in yesterday newspapers. They were known to be asking for more than A$850,000 last year.
5. Consequently, I believe that we are seeing the early signs of these short term pains for this Mandurah suburb before its long term capital growth would start to recover again in the medium term.
6. For your kind update and further comments/discussion, please.
7. Thank you.
regards,
Kenneth KOH
***********************
Dear Lucy,
1. A similar situation can be observed at the Scarborough Beach suburb where train commuters have to alight at the Glendalough Train Station and catch a local bus service ( either Transperth Bus Service 405 or 410) to travel to the local Scarborough Beach Area.
2. Normally, the bus service is available every 30 minutes for non-peak hours and every 10-15 minutes during the peak periods.
3. Such a non-direct public transport arrangement does not seem to have adversely affected the property values at Scarborough Beach suburb.
4. Likewise, I do not think that the present Rockingham Train Statement which is located at the junction of Ennis Avenue/RAE Road, will adversely affect the property values at the Rockingham-Shoalwater coastal areas or the future Rockingham City CDB area too, in the near future.
5. For your kind update and further comments/discussion, please.
6. Thank you.
regards,
Kenneth KOH
Hi Kenneth,
I don't think you can compare Scarborough to Rockingham. Scarborough is an area where-as Rockingham is a city. Shoalwater is an excellent area, other parts of Rockingham are not the best. Scarborough has different socio-economic status than parts of Rockingham.
I am most definately not a fan of the rail set-up. Areas that went up in anticipation of the station such as Success have started to drop in price with many homes coming onto the market and price reductions aplenty.
If I was a visitor to this state and hopped on the train in the city intending to go to Rockingham, I would be very confused when I got off the train as there is nothing around the station. Waiting for 30 minutes for a bus would be annoying as well. I originally come from Sydney where the train system is completely different to Perth's, maybe that is where my frustration comes from.
I think good areas will always retain/rise in value and over-hyped areas seem to be dropping to reasonable levels. If I was to live in Shoalwater or Scarborough, it would be a lifestyle choice, a train line would not be a factor in my decision where-as some people have bought in areas thinking that the train station would be a great way to increase their property value.
Lucy
I don't think you can compare Scarborough to Rockingham. Scarborough is an area where-as Rockingham is a city. Shoalwater is an excellent area, other parts of Rockingham are not the best. Scarborough has different socio-economic status than parts of Rockingham.
I am most definately not a fan of the rail set-up. Areas that went up in anticipation of the station such as Success have started to drop in price with many homes coming onto the market and price reductions aplenty.
If I was a visitor to this state and hopped on the train in the city intending to go to Rockingham, I would be very confused when I got off the train as there is nothing around the station. Waiting for 30 minutes for a bus would be annoying as well. I originally come from Sydney where the train system is completely different to Perth's, maybe that is where my frustration comes from.
I think good areas will always retain/rise in value and over-hyped areas seem to be dropping to reasonable levels. If I was to live in Shoalwater or Scarborough, it would be a lifestyle choice, a train line would not be a factor in my decision where-as some people have bought in areas thinking that the train station would be a great way to increase their property value.
Lucy
************************************
Dear Ausprop,
1. While the concept may sound exciting, its outcome is yet to be seen.
2. Hopefully, its outcome would be something similar/comparable to Subacio Train Station in the near future.
Cheers,
Kenneth KOH
Dear Lucy,
1. I believe that Rockingham-Shoalwaters are appealing as " preferred lifestyle" suburbs due to its coastal/beachside locations, with its own unique appeal and attractions, independant of the transport infrastructure.
2. It seems to me that "Lifestyle" suburbs are generally more popular with the upper-middle class residents who value "suburb exclusiveness" and privacy/"quiet" peaceful environment, marinas/yachting access more than the conveniences of having accessible public transport system.
3. Consequently capital growth potential for lifestyle suburbs are said to be less dependant on the public transport system access.
4 Generally speaking too, it is observed that many of " lifestyle suburbs" tend to be located among the more expensive suburbs.
5. Suburbs that are highly reliant on the conveniences affordby by accessible public transport system for their capital growth, are generally said to be more popular with the working class and lower- upper middle income households.
6.While such a suburb has its mass market appeal, however, it generally lack its own unique social distinctiveness/"exclusiveness" appeal.
7. While reasonable capital growth can be expected due to public amenities and easy public transport access and related personal conveniences for such a suburb, its capital growth is however limited upto a certain level.
8. Any attempt to push the suburb beyond its fair market value is likely to fail, once they could not be properly supported by its underlying market fundamentals.
9. With respect to your comments regarding the housing price for the Success suburb, I personally believe that it is the distance from the beach, rather than the distance from the Perth CBD, which will generally determine the suburb's fair market value, as far as the Perth property market is concerned.
10. Such a trend can be easily observed in the other Australian States too.
11. For your kind update and further comments/discussion, please.
12. Thank you.
regards,
Kenneth KOH
1. I believe that Rockingham-Shoalwaters are appealing as " preferred lifestyle" suburbs due to its coastal/beachside locations, with its own unique appeal and attractions, independant of the transport infrastructure.
2. It seems to me that "Lifestyle" suburbs are generally more popular with the upper-middle class residents who value "suburb exclusiveness" and privacy/"quiet" peaceful environment, marinas/yachting access more than the conveniences of having accessible public transport system.
3. Consequently capital growth potential for lifestyle suburbs are said to be less dependant on the public transport system access.
4 Generally speaking too, it is observed that many of " lifestyle suburbs" tend to be located among the more expensive suburbs.
5. Suburbs that are highly reliant on the conveniences affordby by accessible public transport system for their capital growth, are generally said to be more popular with the working class and lower- upper middle income households.
6.While such a suburb has its mass market appeal, however, it generally lack its own unique social distinctiveness/"exclusiveness" appeal.
7. While reasonable capital growth can be expected due to public amenities and easy public transport access and related personal conveniences for such a suburb, its capital growth is however limited upto a certain level.
8. Any attempt to push the suburb beyond its fair market value is likely to fail, once they could not be properly supported by its underlying market fundamentals.
9. With respect to your comments regarding the housing price for the Success suburb, I personally believe that it is the distance from the beach, rather than the distance from the Perth CBD, which will generally determine the suburb's fair market value, as far as the Perth property market is concerned.
10. Such a trend can be easily observed in the other Australian States too.
11. For your kind update and further comments/discussion, please.
12. Thank you.
regards,
Kenneth KOH
I thought the letting fee charged to the Tenant and the Landlord were abolished.
At least now l wont be surprised when the monthly statement arrives from my newly leased ip.
Thanks Daz
cheers yadreamin
Similar threads
