Is now the worst time to buy?

Is Perth really going to bottom out this year? It isnt a market I know enough about but from the bits I have researched, it seems like it'll take another 18 months or so to really reach a landing.

 

Due to the market being down more like 350pw.....a couple of years ago would definitely have been around $420

 

@Sonamic care to share what beachside-ish suburb you are referring to?

 

Errrrr I wasn't. 'Twas @sash

I am looking towards Perth though.

 

Lols sorry mate I misread it! Too late in the day (scratches head). @sash well done on sleuthing out that spot, the buy-in and rental returns sound pretty good for metro beachside!

 

May be not the right time to buy. But, looking at all these indicators, looks like it's about 'right' time to sell

 

nope
I am from Perth and we had a rising market in 2013-2014 (mid), bust cycles last much longer than boom cycles. I don't need to mention the Mining boom is over, diasaster for WA

stock on the market over 14,000, balance market is I believe around 12,000

We have an oversupply of apartments not only inner city everywhere.

I develop property and it stopped making sense 2 years ago, so once again developers have too much stock. Oversupply = declining market

I believe sash strategy is buy and hold with a yield that covers mortgage/debt.

For those expecting growth in near future in Perth may need to rethink this one, I don't see bargains, I see potential ongoing losses just my opinion.

 

best time to sell in Perth was late 2013, early 2014

 

Thanks @MTR especially for those dwelling numbers.

From what you say I'm inclined to agree i regards to b&h investors likely not seeing gains for some time. I don't have the local knowledge you have, so this makes sense. But what about the whole "markets within markets" mantra? Is that a play here? I.e. are there some pockets of Perth that might breakout of this mold and see growth in the coming few years?

 

there will always be opportunities, especially if you can add value.

perhaps read posts on Perth, ie Westminster, sanj, perthguy.

it's also very much dependent on your strategy

I am out of this market for now, not targeting any areas.

 

Good advice. Stepping out of my Eastern States comfort zone is also a factor when it comes to knowledge and learning new markets

 

Well...there are always strategic buys...the sales guys I built with just picked up a canal front block for 320k...he plans ot build a home for 260k and keep it.

This sort of stuff sells for over $1m in a boom. Fortune favors the patient...a very smart move by him.

Everyone has their own strategy but as Warren Buffet says be greedy when others are fearful and fearful when others are greedy.

I expect to double my asset base again in another 5 years. Whilst keeping my LVR to under 40%.

 

Something like this @sash ?

48 Waterside Drive Mandurah WA 6210 - House for Sale #121691374 - realestate.com.au

10 De Grey Close Mandurah WA 6210 - House for Sale #121712066 - realestate.com.au

 

Yes...but just the land I believe he told me it was only 420 sqm...he want to be put a 26sqm home it. Apparently the older Brits love the area and will pay to live there!

 

Partly correct...I hold property but build in a 15-20% gain and look for a 6% return minimum

The Wellard development I did still have about a 20% gain intact albeit it has dropped from the 30% gain due the Perth market. The rent has dropped from a 7% return to now a 6% return.

Similar things have happened to my Lakelands (15% gain with 6% return) and Butler (20% gain with 6.5% return ..same tenant for last 3 years).

 

Well, there is a multitude of things. In no order...

APRA lending changes already cooled Sydney, the full effect of the changes are yet to be realised, but Labours plans at this time, which just play to populism, is throwing another bucket of water on top after the fire is out - really stupid at this point with more evidence of a weak economy.

Mining Boom - it is well and truly over, you can easily see the effect of this, the brakes are on fully, large part of the sector is still and looks to stay this way for a while. Slows the whole economy.

Stability - people like stability, business needs stability, when you have months and months ahead with both sides that could have taken a wrecking ball to various things, it certainly will not help housing investment, but it also means business sit on the sides, these changes are big, 3 decades of the same thing then bam, on top of the restrictions above that not fully played out = stupid and poor timing. Also look at politics of late, no stability for a long time, no clear direction, no strong leadership.

More tax, well, back in the 70's there was no CG tax, now it is 50%, they want to do 75%, all of this while we are in a slowdown = dumb, stupid, populism. Are you going to go out and invest if the market is likely to be flat for some time in various places and if you do make anything, get slugged with an extra 25%, to me it means these ning nongs think it is all traveling as it was during the mining boom.

Our govts often do things backwards, when things are picking up, they pour on petrol, when they are slowing they slam the brakes on and throw out a few anchors as well.

At the end of the day, Labour does not have the money to spend and waste that it did during the Rudd years, with a slowing and poor economic outlook, they want to now slam on the brakes, the exact opposite of what is needed, and while I am not impressed with the Libs myself, there is no way in good conscience that this other plan with mostly the same people who were in the Rudd/Gillard govt be given the green light, hat is how I see it.

 

I guess labor peceive that the extra CGT revenue they make will help bring in more revenue, as opposed to them spending more. In the short term this may be true.

I can imagine though the states hurting as a result of their plan. Why? States rely heavily on stamp duty revenue every time a property changes hands. If investing becomes less tax attractive, it is possible that less property will change hands. Those who are already invested in the "pre NG days" are likely to hold properties as long as possible and not sell (since these properties are still under the old rules). Less traded properties = less stte-based tax revenue coming in.

Had the states changed their stamp duty rules prior to this election (to an annualised one instead of a one-time-upfront one), then it'd be fine.

To me, at this stage labors plan is very short-sighted. I don't think it has properly thought about wider economic implications 5, 10, or 20 years down the track.

 

I think they have thought out the implications but won't be discussing the true long term.

It's no good for our economy to have housing at such a high multiple of income. There are all sorts of negative effects.

Median Housing going back to 2-3 times median income is the long term I think. Houses going from $80K to $700K over fifteen years isn't normal and not good overall.

Ultimately this is what "making housing affordable" means - making housing cheaper in relation to wages.

 

This article reads like a doomsday article on the house prices in Australia and that it's all about to come crashing down.

ABS House Price Indices | Who crashed the economy?

What's interesting is that the CGT discount caused house prices to spike significantly since the turn of the millenium - prior to that, prices were quite steady compared with the median wage

So will the proposed cut in discount cause a crash?

But a factor to keep prices rising is the boom of wealthy asians into certain areas especially with good schools, who overflow into nearby suburbs once the desired suburb gets overpriced.

I know nothing about economics and finance so I may have just sounded really stupid

 

It's always a good time to buy somewhere.