How many more years of pain for the Perth market?

It depends on how investors structured their purchases. I just had appraisals and I'm still above what the properties owe me (based on purchase price + purchase costs). If you look at just loans then I'm way ahead because of low LVR purchases. I don't think that counts though. If I bought at a low LVR and the value dropped then I would consider that to be negative equity.

I should mention I am an active investor so my portfolio comprises of renovated properties and a build. The renovations are what have stopped me being in negative equity.

 

thanks guys,also i will keep renting until the tide turns ,maybe another few years from now on
MTR ,she tells how really is ,thanks

 

no one can ever really pick the bottom though. Best to buy when you can afford and when you are ready. There are very good deals in perth at the moment, I assume there is still going to be good deals in perth in 2 years however coupled with increased competition.

 

I could afford it in 2014 ,but I it did not bought because of loose lending and crazy prices here,
and it looks still expensive here for me anyway
ah " increased competition" if they getting finance
we will see

 

You cant pick the bottom, I agree

However, When markets move they dont double overnight, you can generally start to see stock shrink, for me this is then a buy
I am not worried about competition far more interested in market conditions

No right or wrong, just what suits your investing profile

If investors can make money adding value and increasing value in any market then this is ideal, as someone mentioned in another post

 

2014 was crazy expensive. I would have thought there was much better value now for you but it all depends on what/where/why you want to buy.

 

https://thewest.com.au/business/hou...-get-easier-access-to-keystart-ng-b881183647z

no point buying now,increasing supply will come,means prices will going even more lower

 

Keystart has its place for people with difficulty saving a deposit. Instead of a 2% deposit, if they only manage to save 5% to 7% then as FHBs they have access to mainstream lenders at much lower rates. Sure Keystart doesn't charge LMI but at those rates, the LMI equivalent would have been paid in the first 2 years.

 

Actually this may have the opposite effect of what you are thinking. Stimulating the sub $480k market can drive up prices in that bracket which flows onto people owning that stock to then upgrade. However it's only for 6mths so I'm not sure how much use it actually is and there isn't any additional FHOG increases to go with it so people might well pass up the opportunity. Keystart loans would have to be one of the best products for Perth people to get into the market - it's not brilliant but it gets people into the market who can't get a big enough deposit.

 

What is currently holding Perth back?
Oversupply, lack of money availability, lack of confidence due to Sydney and Melbourne falls, poor WA economy etc?
Blocks of land are being developed around me more as time goes on.

 

Mainly these two:
Availabiity of credit
Many people sittiing on negative equity and cant refinance or sell

Investors usually drive up price growth due to their speculative nature. No investors are buying due to the above plus low yields and low consumer confidence.

 

If lenders continue to assess everyone at 7.25% then barely anyone qualifies for a decent first home, which means no one can afford those selling their current first in better areas to buy a second etc etc.

It's a huge snowball and it's going to get worse unless assessments rates are brought back to a more reasonable 5 or 6%.

 

I keep seeing Perth is at 2006 prices in some areas.
People were buying houses in 2006
Google says
May-2006, RBA Cash Rate 5.75, Bank Std Variable Rate 7.55

The question is for Perth, pretty easy to find a house under $350k (maybe not the best location)

I understand how lending is an issue for Melbourne and Sydney but not Perth

 

What indicators are there that supply will increase?

Last time I checked, housing approvals were at 20 year lows, which would indicate the opposite of what you are saying

 

There are decent properties under $400k. It's not a huge amount, especially for DINKS

 

No demand due to a dwindling population growth. Construction workers left WA in droves for the eastern states. Most mines are in a production stage that doesn't actually require that much staff (compared to the construction phase). Retail is dead. Construction is dead. Civil and rail infrastructure projects post election might help?

 

Mortgage delinquencies mount as more borrowers find their home is worth less than their loan

 

That's all priced into the correction we had. #Perth30k is pretty desperate. #Perth20k is a mixed bag. #Perth10k is OO's upgrading and investors buying into suburbs with great fundamentals for a good price.

Perth has a population of 2million - less than half that of Sydney. #Sydney10k property prices are 3+ times that of Perth.

 

The value of your house has nothing to do with mortgage delinquencies.
Losing your job or changed income does.
Negative equity is only an issue if your forced to sell.
Negative equity does not cause mortgage delinquencies.

 

Doesn't it? Lets say you lose your job and you have 200k in equity. You might sell.

Imagine you are in the same position in negative equity.