How many more years of pain for the Perth market?

Thanks for the tip will try it

 

Put 100k down in a 800 SAM South Karrinyup property now or put 200k in a 800 sqm Floreat property now. Then Let's wait 12 years. I can guarantee you that South Karrinyup will be a better investment. By far. When you do the numbers after 12 you will see that Karrinyup is a far better investment and had you bought Floreat you would be crying.

Buy Floreat now for cash, sure but still south Karrinyup for cash will beat it in 12 years time.

 

Dafuq did I just read?

Do you even know what is happening with 'catchment' properties in Perth at the moment?

Karrinyup is a feeder suburb for Carine or Duncraig HS.

Floreat is a feeder for Churchlands HS or Shenton College.

No brainer.

 

Gee, I don't know Ald.

I live in Marangaroo, which cost 1/2 to 1/3 of Karrinyup,and we have the same crime rate.

Your area seems dangerous and full of nutters.

Perth Crime Map

 

Interesting resource @boeman . Would be even more interesting to be able to map change in crime rates over time to identify 'improving' areas.

Does anyone use crime statistics when assessing which areas to invest in? If so what do you specifically look for?

 

I do in USA market
You can get stats on anything in US, including all the sex offenders, even names. Wish we had more access to more info in Australia.

 

Hey,

Great post! Would you be able to elaborate on point 6? My understanding was that Perth population grew only at 0.9% last year, which is well below Sidney, Melbourne and Brisbane.

 

3218.0 - Regional Population Growth, Australia, 2015-16

Disagree with population growth for Perth

this is here say, a predication and will be totally dependent on economy of the State at the time. Unless we can replace mining or have another mother of all mining booms we will not be holding number 1 spot for immigration/population growth.

I don't know whether Perth property market is at the bottom, that is a big question mark? no one does, I will tell you in another 18 months time

We currently have oversupply and the market is price sensitive. I think certain areas/suburbs will continue to fall back. We have highest rate of mortgage default at the moment in Australia.

Perth currently has highest unemployment, great news if we are seeing some changes, but you will need much more than just the jobs mentioned by OP for the property market to start moving.

I do agree that there are bargains to be had and I would be looking at tightly held areas, limited land for this ie inner city, development sites. Though you will need deep pockets for this but perhaps in 5 years time you may be laughing???
I am seeing builders buying large parcels of land and developing sites, however I think their margins may be their saving grace?

I was also wondering whether some strategies in inner city where you buy a duplex block, desirable location and build specked up luxury houses may work (green title)?? Don't know. I do believe there is a demand for this product, but whether it stacks up not sure?

 

I think the indicator's are still negative.
1. Population growth is low, and the demographic of growth isn't supportive.

2. Delinquencies are still rising. People continue to hang on hoping for a turnaround that's not showing. Meaning an overhang.

3. Lot of predictions for further weakness in Iron Ore.

4. There are major projects going through the construction phase currently that will finish and not be replaced by new construction. Meaning further job market weakness.

5. Oversupply in the commercial & residential market in a lot of area's based on vacancies.

6. I'd expect further redundancies/wage constraint happening going forward, not going to see much support from government.

I think Perth will need to go through a period of under-investment, mine's reaching end of life. Too see a boom. I can't see much happening for years.

 

Sadly I see the same.

Though, am trying to work out why did Perth have a mini boom in 2013/14? I think it was the FHB driving this market at this time. Anyone know?

I don't go into the city very often but was surprised when I did pop in to see some shops closed up in a major centre, looks like a ghost town

I am holding onto development sites that make no sense at the moment, even if I built and did not sell the rents are woeful

Its tempting when I see some properties that look very cheap, but unless I see the economy moving I don't believe I am missing out on anything, there will continue to be bargains around the corner every week,

 

There was a fair bit of construction (or construction in design) in 13 / 14 - Schools, Air Port, Rail, Crown, Oval, Westfield spending a $B, Prison, Apartments, Elizabeth Quay. Also a lot of $30 - $100M projects which are good size for SMEs.
Everything has quietened now though, and looks worse going forward for the next 24 months in engineering / commercial construction.

 

It was mainly due to the massive population growth when the big construction projects were on for the resources sector. Rental yields went up through the roof which led people to buy IPs as yields were insane, house prices went up, which in turn made feasibilities stack up on end value and rental values so development sites prices went up and so it rolled on.
And then the resource sector went from development/construction to production and voila only needed a third of the number of people (and a totally different set of people in production of course) so all those tradies came back to Perth or the states where they had come from (and NZ). Vacancy rates rose, yields went down (really to normal at around 4%), people who'd just finished their development projects panicked realising their feaso wasn't conservative and they had no contingency in it and housing values went down.

 

Some more bad news. WA economy lags nation, again

 

Saw the headline, didn't even bother clicking the link.

 

guys,as long as there building more houses for a few tenants only,there will be no recovery
did i mention more houses ,oh yes i did

 

I remember having to travel to Perth in 2011 for work and had to book some accomodation (this was about a month out) and there was literally nothing to book regardless of price. I couldn't believe that everything was booked out so I went through a travel agent who said the same thing. The best thing he could find me was backpackers accomodation. I think this was just before Airbnb but even if it was around it would still be limited inventory or really expensive stock. 2011-2017 is still a long time but pretty amazing to see how things have changed.

Should have been better planning post mining so does the blame lay with the government or are there are factors?

 

Article on the ABC saying the Perth apartment market will be in oversupply for the next 3 year years:

Prolonged pain for Perth unit owners amid sluggish market

 

One week ago talking about Perth "The CoreLogic Hedonic Home Value Index reveals that unit prices surged 1.8% in July and 4.2% in the past three months to a median price of $400,000, but house prices dropped 1.6% last month to return a 2.5% decline since the same time last year."

 

means next 3 years no recovery

 

I suspect that the hedonistic index is quite hedonistic in its statistical accuracy....