How many more years of pain for the Perth market?

Actually, only Tianqi (Chinese group) has setup in Kwinana, they're currently building 2 process plants. Albermerle (Americans) are gearing up to build a refinery in Bunbury, but haven't started yet. Every other lithium player in WA is a mining and concentrating operation only.

 

its not madness its delusional

 

Well it was 3% growth per year but yes I get your point. I basically meant that it would be much preferable to the stagnant, sliding backwards we have been experiencing. In an ideal world 5% is the minimum anyone wants.

 

3% growth year on year is good. After 5 years the total growth is more than 15% because of compounding.

 

Yeah I was referring to 3% per year for 5 years, of course it's better than losing money but that's like saying getting run over by a truck is better than falling out of a 50 storey window, yeah it obviously is by default but that doesn't mean in isolation the truck outcome is a good one or one to aspire too either

Just my opinion


I mean as a recently discussed option on previius page, like for like comparisons of some port headland property would show OVER 15%, in some cases over 20% growth in last 12-15 months alone, I just think aiming for and being satisfied with 15% over 5 years with all the costs etc involved and pre inflation consideration is setting the bar too low, might as well chuck it in the bank for that kind of return

 

It's not good

Come on seriously?

It's not dogsh#t sure but good?

After all costs are included what would .e the overall gain per year from a dollar as well as percentage basis?

As you and I and many others have experienced, sometimes these investments see large drops in rents Orr longer vacancies than usual etc, the numbers wouldnt support the decision to allocate the capital to this if the goal was to get 3% per year for 5 years, notnot w there are other options for caoital that either offer similar returns for a lot less risk or less volatility or higher returns

 

It would suit my business model fine. Sure a lot better than going backwards each year for 5 years.

 

I am thinking of buying a South Karrinyup property and a Mt Lawley property this weekend. Am debating flying there or watching the market a bit more and doing it in winter.

 

I think it only works if you are highly geared with the properties covering the interest costs. The gearing then mulitplies the return on your capital invested.

80% LVR = 5 times return so 5 x 3% = 15%.

Not great IMHO but that is how some guys think of it. Especially if they are not prepared to borrow for a share portfolio.

 

But how much net gain/profit isnthere once all costs considered including holding costs, amortising (in a way) stamp duty and maybe selling costs etc say over 10 yearsbor however long the individual circumstances justifies?

If you allow for 8% or so in and out costs that's .8% per year, or roughly a quarter of these supposelfs good 3% returns

The numbers just don't support a 3 pa yearly return over 5 years on a Perth Resi with our typical yields and management fees etc being a good outcome. Every single cent spent in any investment has to be accounted for when considering its overall return and or its potential return it doing a feaso, I know I don't have to convince you of that with your profession and how meticulous and thorough you are

I honestly don't have a dog in this fight, I'm happy to admit if wrong and change my opinion here if my calcs were wrong and someone can show me different. I just dont see it though but I've been wrong plenty of times before

 

I agree - but I can also see where others come from.

 

Ross
I don't get it really, its smoke and mirrors... no one shoot me please

Yields are woeful around Australia atm, but the difference is Syd and Melb have recently seen phenomenal growth unlike Perth, when you can make 40% on your capital then its a different story, you can wear it and have the choice to cash out or access equity.


MTR

 

Must be a full moon, the 2 of us are in apparent full agreement

 

No idea about south Karrinyup but you'd be upset with yourself for not doing so 6-12 months ago when it comes to city beach, cott, parts of Floreat, hell even Wembley downs today Vs 3 months ago

Likewise mt Lawley

The super bargains stupidly massively under replacement cost and often not much over land fost are largely gone and have been for a while but the trend is certainly one of increasing demand and price growth for houses in upper mifdle, traditionally blue chip and coastal properties imo

Eg there are a couple of properties that sold early to mid last year that i believe comfortably would be worth 30% but likely 40% more than purchase price and that's in 7/8 months and is supported by comparable current sales info

These include areas like Mt pleasant, north Fremantle, dalkeith, nedlands and mount Lawley

 

Like I said earlier not being bad doesn't automatically make something good, in response to your second point.

I would like to say though thatultimately the only relevant opinoon is that of the person directly affected, so if that number works for you and your model I would be a bit silly to say it doesn't, I concede that

 

Just checked and in last 12 months there has also been dignnigisig growth in prices as well as number of transactions whennit comes to CBD penthouses and sub penthouses over 1.5m, eg one went from selling for 2.35m in mid 2016 to 2.6m in Dec 26 to 2.85m in Nov 17, This is for 2 identical penthouses, not the same one sold 3 times. This idnaftri a total collapse from purchase price in 2005 OTP for 3.5m, settling in 2009 or so and initially trying to sell for 5m and being on market over 500 days

One that I was involved in the purchase and renovation of has seen comfortably 800k profit since 2016 but possibly as much as 1.2m, hard to exactly value in this msrkrt

 

Christ. Sorry for anyone who had to read that...
*Significant
*Is after

 

After some investigation, we found there not any good opportunities in the right area (Bateman/Bull Creek/Willetton) in price range of 600K to 800K. Is this a sign of market is rising up?

 

Is it a sign of intelligence that I could understand your 4 thumbed phone post? I suspect it's not

 

I wont speak for Karrinyup, but I live in Mt Lawley I have a pretty good handle on this suburb

What I have seen over the last boom/bust cycle is prices in Mt Lawley ridiculously cheap compared to 2006/7.
Desirable locations in tree line street with entry level of 1.2M are now flying out the door, multiple offer, this is entry point for a nice period home.
Huge demand now for this product, prices are not rising but its certainly a very good time to jump in dependent on your strategy.

Local re agent said that he has been achieving amazing prices in surrounding areas and clearly Mt Lawley under valued compared to surrounds.

Now there seems to be a shift properties $2M-3M were not selling/struggling.
Now I am seeing sold signs and there are some buyers coming to the market now.

Our friends sold their property, did not hit the market, it has gone unconditional but I wont disclose the sold price other than to say brilliant result for them

Mount Lawley address available on request - House for Sale #127723098 - realestate.com.au

Units/apartments - to sell they must be priced correctly to meet market, good design, high spec. Average does not cut it anymore IMHO in this market.
Is it a good time to buy this product?? Don't know, personally if you have deep pockets I would go a nice period home and if you can find something where you can develop rear block .... dive in