WA Perth housing and unit prices slump

But what sort of return would it get MTR ?

Cliff

 

Not sure, Jess could provide this info?. I was not necessarily thinking about returns as I doubt it would cut it, you would need to be buying at lower entry level to achieve higher returns IMO

Mandurah in general I think rents are significantly lower than Perth.
If you are chasing yields then perhaps the most effective avenue would possibly be to build, land and house package as you would have depreciation. Pick up the land at the right price and build its a very easy process IMO compared to other States.

We have excellent project builders in Perth and extremely competitive.
I believe Lakelands may be an area to look at as currently building new shopping centre.

MTR

 

I know that house, I walk by it all the time. Pre-reno, I reckon it would get maybe $400/wk? It's a PPOR project, or a flip in a better market rather than something you'd do for the yield.

The inside looks nice but the outside shows it's really just a shack - they're renoing it at the moment and it's coming up really nicely, new cladding, decking, plantation shutters.

For me, I'd buy land in Old Madora Bay over Lakelands, and build whatever you want on this side, plus the land is (much) bigger so if you got approval for 2 OOT, you have the option to subdivide down the track. You can walk to the proposed Lakelands shops from here if you wanted too, but won't get the busy-ness you get from being so close to them because they're on the other side of Mandurah Rd. Plus you can walk to the beach from here, where you wouldn't from Lakelands.

 

There are much better houses than this going for far less now in Madora Bay.
The Mandurah market is about 50% off already.

 

Also believe plans have already been approved for commercial precinct - old Madora Bay, near Singleton?? But this was some years ago, nothing has happened though. It would be great if they started to redevelop this area, bring it on. I would most certainly develop my property.

MTR

 

Where? post the links

 

http://www.realestate.com.au/property-house-wa-madora+bay-120151721

http://www.realestate.com.au/property-house-wa-madora+bay-119673327

http://www.realestate.com.au/property-house-wa-madora+bay-118978179

 

The problem is you will be lucky if you can get $400 a week for any of them.
That's if you can find a tenant.

 

The top 2 are new subdivision of Madora Bay, land component will be much smaller than blocks in old Madora Bay. I believe there is also a mix of State Housing homes in this area?? not sure, someone may be able to clarify this one.

Last one Parmelia Way is one street back from the beach, but not beach front, I thought achieved reasonable sales price in this environment, when considering beachfront property I posted achieved $620K.

MTR

 

Position , position , position . You can upgrade the house , but not the land .

Cliff

 

There isn't even a lot of stuff listed as sold which would tell me the agents are telling people not to disclose their purchase prices in the main due to the situation being so dire, or stuff just isn't selling, which means the same thing.

Remember Mandurah isn't at all exclusive.

 

MTR, have a good look.
They wern't inclined to take a photo of the front of the house for obvious reasons.


This from Google Maps: Rotate the picture and have a look at your beachfront.
It's not exactly a beautiful one.

https://www.google.com.au/maps/plac...0x2a327e704c3efa09:0xec8d05bd17e3803d!6m1!1e1

 

That house was sold 21 months ago in Jan 2014, according to the ad. I think the market now is worse than at the start of 2014, maybe I'm wrong.

 

I don't pretend to be an expert on how old Google maps images are, but if that is a relatively recent photo, then that place is a tip and doesn't even look like it's been rented.
Even at land value, it would have to be looking dubious now, there's a fair bit of money to be outlayed just in knocking it down and in siteworks for a new development.

 

If you scroll through the sold properties on that same street, you will see that number 34, another tip, but on a larger block, sold for $635,000 3 years earlier than the other one.

 

Further to that, number 6 on the same street recently sold for $825,000.
It was listed for sale in 2011 for $1055,000.
After 4 years they've excepted $330,000 less.

Number 19 was listed for sale in 2009 for $1095,000
By 2011, the ask was $710,000

 

It's $230k less.

The thing is, the prices that were getting paid back then were silly - prices that are getting paid now are much more sustainable and realistic.

There was a bubble in 2007, and it's corrected. At some point after a correction prices become realistic again.

There's no fear of missing out in the purchases that are taking place now, they are much more likely to be rational decisions from people who see value for whatever reason.

 

Granted, my mistake, the other one was $380K odd less.
I would think there is still plenty of heat to come out of there yet though.

I don't know what the overall streetscape is like, but if there was too many houses on it that looked like that one, and were being lived in as PPOR, I'd be worried.

 

That's the thing around here, there are LOTS of properties that are empty and used only for holiday homes. The ones that are lived in by home owners are generally really nice, and the rented ones look like most rentals - not quite as nice. The holiday homes look like shacks, which is what that house would have been prior to being purchased by home owners who are now renovating.

It's a really unusual area because of the holiday home factor, I imagine it's not everyone's cup of tea but I love the holiday vibe Jim and I always walk around renovating the shacks in our head...

 

We bought our weekender in north arm cove for 750 . It was listed four years before for 1.4 mill .

Areas that have a high percentage of weekenders are badly affected during slumps as they're not essential , and the weekender will go before the city house .

North Arm cove is fourty mins from newcastle and two hours from Sydney so while there lots of people who live there permanently , they tend to be locals who are are tradies , paramedics etc , so on good wages , but not really high paying jobs and the high prices are generally paid by people from sydney , either as retirement houses or weekenders

How far is it from Perth and other employment centres . Any idea on break up between different groups .

Cliff