How many more years of pain for the Perth market?

going through REIWA's facebook photos over a solid few hours and manually pulling it into excel.. its a great way to spend a hangover

 

And go back to Nov 2013 it was 4044, 12 months prior that it was 2758.
Interestingly in 4 weeks from Nov 2013 to Dec 2013 an additional 500 properties were available for rent before it slowed down a bit.
In the mining industry it was called the "snatch it season" as many would quite their jobs if they could not get the Christmas break off ,and then look for a new job in mid Jan.
For many that moved here from the east coast for the big money it was also a good time to move back home and spend time with family and go back to living a normal life,as the mining boom really started to slow down. It was in mid 2013 when gold got completely hammered and quite a few mines closed and others scaled back their workforce

 

This is what I am seeing in the Perth market.....

This property was reduced and on the market for some time. This price point will not fly out the door. This property will have possibly sold for $2.4-2.5M in 2016/17
Clearly this market has not recovered

reiwa.com - 69 Farnley Street, Mount Lawley

This property sold in first day on the market.
Its the price point that is attractive, but also the product millennials

16 Farnley Street, Mount Lawley WA 6050 - House for Sale

 

From what I've been witnessing over the past few months I don't see a recovery Anytime soon! Not in the lower end anyway.

What I'm seeing in the low end, buyers are either putting their property on the market too high to begin with and then having to lower it a few times to meet the market or maybe this means values are still falling and we haven't reached the bottom.

For instance this 2x1 in a nice location in Yokine is now asking $210k That is quite amazing as I bought my 1 bed ppor for $210k 9 years ago. And your getting an extra bedroom for the same amount.

It was asking $227 for the past couple of months and was asking from $255k in January last year and according to old listings back in 2015 it was asking $280-310k

SPENCER (AVE|AVENUE|ROAD|STREET) (Filtered) Yokine Real Estate Old Listings

13/56 Spencer Avenue Yokine WA 6060 - Unit for Sale #127314818 - realestate.com.au

I'm seeing a few properties being pulled off the market too. I guess owners arnt wanting to lower even further.

 

I don't think anyone has said anything has recovered. Just that the recovery might be starting. Getting back to 2014 prices will take at least a few years,

As you say, a well priced, "affordable" house in the area will sell quickly for those people who want to upgrade into the area. The $900-$1.2m is very very hot segment.

 

Not so.... but not going down this road

Yes well located properties are hot, but still need to be priced to meet market from what I see

 

This guy seems supremely confident that Perth has reached the bottom. Not sure i share his certainty but some interesting stats though

 

Hmmm interesting thanks.

I wonder how long the recovery part of the cycle will go for before things really start to take off. I'm guessing it all just depends.

Maybe things might all of a sudden take off. It'd be nice to be prepared and have a few in Perth in time for the upturn.

Like the last Perth boom prices almost doubled in the space of a few years. Not that this is going to happen again mind you. Such a huge boom.

Any thoughts!?

 

thanks for sharing, his assumption seem quite reasonable given the stats...

 

IF number of properties for rent continues its downward trend the vacancy rate should start to follow, and eventually rents will stabilise and start creeping up a bit. Hopefully this motivates FHBs to start buying at current bargain prices, likewise investors start buying see potential for better rental returns, and property prices start moving a little. My guess is all these steps will take at least 12 months before any meaningful movement in house prices.
As others have said, whilst the WA economy looks so bleak there's nothing to put upward pressure on house prices whilst rentals are so cheap.
I wish McGowan & Co would look to save a bit of money by scrapping the $10K FHB grant for new builds, that would help

 

@Rex that is how I view it too.
Rental market recovery will lead to a property price recovery.

 

Yes but the 2016 price was lower than market at that time. I usually do that to attract a wider range of potential tenants. The rental price asked is around the same as a decent 3 br one bath villa but this is a house, albeit a small house about the size of a large villa.

The property at Ascot was just let out, at a 10% rental discount after being on the market for two months, but the house in Vic Park has only attracted one other call to the agent since my last post. In normal times (ie no boom or slump) that property is leased within a week given its convenient location. It could be a local thing as my agent advises me that there are several similar properties for rent within a 500m radius with some of them being longer on there books than mine.

Personally neither I, other investors I know or my real estate agent see much difference in the rental market today than what it was a year ago. It doesn't really surprise me though with the amount of new apartments that have flooded the market in the City and surrounds, take Cannington as one example and have been sold quite cheaply to many of those that would have otherwise rented.

 

Yes, very good points that can not be ignored....facts

 

I've seen a pretty big difference in the rental market compared to a year ago. Lots of mini markets in Perth where there's been surprising rental demand and even shortages for certain types of properties.

The REIWA numbers reflect a change too. I don't know why this is so disputed.

 

I'm not sure I understand your point.
I was questioning why you'd be expecting to get 2016 rental rates when the rental market is worse than then? I'd be dropping the price and getting a tenant in rather than waiting 2 months like the other property.
If, as you say your 2016 rate was under the 2016 rates then that could be similar to today's rates but the proof seems to indicate that it's not and that you need to drop your price to get a tenant in.
Even if general Perth rental vacancies have reduced (which they have) it can be a local area thing or simply that even with a reduction in numbers that rents haven't recovered to 2016 rates for your area.

 

Buyer’s agents report increasing competition in Perth property market - Smart Property Investment

 

So a Perth BA company who makes money off more people buying property in Perth is recommending people to buy more property in Perth. Shocker.
Not saying the information in the article is necessarily wrong, but get a better source ffs.

 

I get my information from all sources, bits and pieces and put a puzzle together. I keep what I like and discard what I don't. Just because I read an article from wherever doesn't mean I take everything it says as gospel and I use my filter to determine any biases and to what extent.

No need to be so aggressive. You get nowhere.

 

My g/friend is doing very well in the current Perth market, but she is developing and I have mentioned in another thread she sources product from China at huge discount. Not rubbish, its high quality stuff.

I think for the average investor buying in Perth market today with a strategy of buy and hold is probably not going to be too smart. No growth, low rental yields and having to pay debt IMHO

This is what she just sold, very lucrative project and she has another 2 sites she secured, similar location inner city, desirable pockets. Down sizers/baby boomers/millennials love this stuff. Has to be high spec and good design for this to work.
End values around $1.4M range

15 Barlee Street, Mount Lawley, WA 6050 - View Sold History & Research Property Values - realestate.com.au

Don't get me started on Momentum....

 

Yea I get frustrated with information from biased sources put forward as some sort of proof.
If you are getting information from multiple sources, maybe posting independently sourced information instead of this would be more credible.