How many more years of pain for the Perth market?

not in balga guys

 

Lots of same same stock in balga...

On a positive note, the gorgon expansion project got approved. Hopefully they will use locals for employment.

Chevron announces Gorgon gas expansion off WA coast - ABC News (Australian Broadcasting Corporation)

 

Lots of pain in Balga, developers went hard, same horrible cookie cutter cheap stock. Killed this suburb

 

Girrawheen won’t end up quite as bad but I think developers will smash that area too, will have to wait and see...

Is anyone developing in these areas right now...?

 

Agree
Numbers wont come close stacking up

 

I have a property in girrawheen and have plans to develop but will not be for awhile. I'd like to see what sort of appetite there is for different styles of development apart from typical 3x2m villas like balga.

 

ok ,update on my renting journey
I moved out of balga to nollamara ,much better house and modern
paying 45 aud more from 275 to 320 ,closer to the city as well
bevor I moved out I ask the landlord for Reno"s ,bu he refused
when we put cancellation for the prop ,he put the rent down to 230 and start to fixing things
the property manager gave up on him ,now he is paying the price

 

"There are a few areas i keep an eye on, one of them the R60 lots in Joondalup around the Currambine train station. A year ago (not even) there were multiple properties going in the 420-450 range. now there is nothing available, and the non-development houses in the area start at 450+. Can just about say they people who got in at 420k have seen 10% growth already."

Have you noticed that all the big blocks in padbury,heathridge and craigie are being snapped so quickly.Seems like many people are subdividing there.

 

If you look at the original thread posted in 2016.... How many years of pain
Talking about the market in general and rising

I think we can say most likely 4-7 years

Credit squeeze has not helped

 

Not looking good. Although REIWA and others are talking the market up, Perth property prices actually declined a further 1.7% in February, it's worst month to month result.

'Every market losing steam' as housing downturn extends nationwide

 

Approaching official bear market status!

 

I started this thread 3 years ago and the most popular option in the poll is the downturn would have been over by now (2-3 years).

But the decline continues and this is the longest downturn we have ever seen in the Perth market.

 

Credit squeeze not helped, markets are trending south almost all States is Oz

 

I started buying at the peak of the boom (end of 06 and start of 07) and 13 years later im still underwater. Has anyone got any data to suggest this will play out like the 80s boom in Japan where house prices were flat for the following 20 years?

 

Omg hope not

In saying this ..... here’s a ray of sunshine I got my primary redidence bank valued came in 200k more than bank value 5 years ago??? Go figure

Surely adding a swimming pool could not add 200k more???

 

So your area did well! Seems not all of Perth was smashed?

 

I sold out in 2014

The numbers did not make sense, just took the profits

Problem is end values

 

Looking back over the last 30 years of the Perth property market, the basic story is:

• 1990 - 2003: Prices increased steadily, doubling in nominal values over this time. Adjusted for inflation however, this represents ~30% real growth over the 13 year period.
  
• 2003 - 2007: Prices boomed Sydney-style, more than doubling in 5 years
• 2007 - 2014: Prices went up and down a bit with mini booms and declines, but overall kept place with inflation over this time. A 20% nominal increase but no real growth.
• 2014 - 2019: Steady price declines, ~17% nominal / ~20% real terms

Basically, there was a one-off boom in 2003 - 2007 that will probably never be repeated. Taking out that boom period, Perth house prices have not moved much in real terms when adjusted for inflation over the last 30 years. In fact the average is only 0.4% per year (excluding the boom years). Certainly the "your house price doubles every 7-10 years" mindset that many people once relied on has been busted.

Summary: Perth houses have generally been a loss-making buy & hold investment (especially with transaction & holding costs), unless you happened to own through that one-off 2003-2007 boom.

Interestingly, Perth property has become very affordable relative to wages growth in recent years. The median house price in 2018 was at 2009 levels, whilst wages in WA increased 42% (nominal) over that 10 year period. So I maintain that there is good potential for future growth, if the bloody state economy would just improve.

 

Those good figures for wages are heavily influence by those that live in Perth and work in the mining industry up north(fifo),maybe about 45,000 -55,000 people with the remaining working in the regional mining towns.
The populations of Perth is about 2.2 million, not sure of the working population of Perth so thats a lot of people that may only earn 50-70K a year.
And if the banks have gone back to the way they were in the late 90s and early 2000s with mining workers, they wont be getting the really big loans like there were getting 5-10 years ago.
The one thing mining companies are very good at are sacking large portions of their workforce very quickly when commodity prices suddenly deteriorate.
That $140k job up north suddenly turns into a $60k job in Perth.
For many jobs specific to the mining industry , there is very little demand for in Perth.
Especially for geologists, charge up and blast crew, dozer, grader and digger operators and those that work in the crushing and mill operations on a minesite.
The banks are fully aware that in a commodity price downturn , many of these people would be out of a job for an extended period, and for others see there incomes drop by 50% at the same time as there daily living expenses shoot back up.

 

@MTR do you know of any area which is above its 2006/7 peak now?