WA Perth housing and unit prices slump

All I am interested to know is whether it's a good time to buy in Perth and surrounds.

 

Overall, I would say it is still to early. I am monitoring the market with a view to jump in maybe early to mid next year. That said, there are always good deal around. There are properties being listed and sold very quickly if they are a good deal in a great location. It depends what you are looking for I guess.

 

I lived in Murdoch between 95 and 97. I like the area but it is so expensive now. I love Freo and surrounds. The city is pretty dead. Where would you look at? Cottesloe and anywhere near the beaches?

 

According to Reiwa, the last time Perth's Rental Vacancy peaked was 1995. The problem with this is that the data comes from a survey of Reiwa members. So think of the entire pool of rental properties. Now knock out the self-managed properties and non-reiwa members. The vacancy rate is based on this reducted number. At best, it is a market indicator rather than an actual 'vacancy rate'. On top of that, can we trust Reiwa stats? They aren't independantly audited you know

source: http://www.yourmortgage.com.au/article/perth-rental-vacancy-rate-hits-14year-high-78927.aspx

critque of Reiwa's vacancy rate statistics: http://nfbpsh.blogspot.com/2012/04/reiwa-rental-vacancies-numbers-are.html

 

It depends on what you want. I would really like to pick up a retain and subdivide block with the front house needing renovation. I'm looking at Beckenham, East Cannington, Belmont, Kewdale, Bayswater, Morley, Dianella, Embleton and Bassendean. Good deals in this category don't really appear on the market too often. It's a very specific product.

 

I'm not into development, not yet anyway but a house generating good cashflow is important to me.

 

In that case, along the coast is a possibility. Have a look for suburbs with flat or no growth since 2010, such as Cottesloe, but strong rental demand and lower than average vacancy rates. It is going to be a bit of work but finding a good deal in a falling market always is.

 

I think anything with a retain and build at rear is possibly hard to get at right price, even today? Then of course you don't want to spend a fortune on the Reno.

Do you know whether this product sells/in demand? Curious, May be hard to sell new home at rear as front home may detract?

 

Thanks @Perthguy the apartments near cottelsoe seem reasonably priced. 1 or 2 bedder easily rented?m,

 

I rear is for my main residence. I have been following the market a bit and I have not seen issues with back homes selling in good locations. That said, I think you would have to price the front aggressively in this market. Here's one that has been on for a while. Possibly priced to high for this product in this market?

http://www.realestate.com.au/property-house-wa-bayswater-120327213

 

Thanks
Bayswater, good location

 

If the front house looked like this one, it would definitely detract from the rear. With a house like this, I don't think it can be fixed up.

http://raywhitecannington.com.au/wa/beckenham/1330526/

 

For price, there are still decent deals around. 'Retain' is a bit generous with some of the properties though. I reckon I would renovate this one with a bulldozer...
http://www.realestate.com.au/property-house-wa-bayswater-120306009

Those retain and builts in baysie are selling like hot cakes, even in this market. Check out the marketing campaign for this one. Apparently it is under offer already:

http://www.realestate.com.au/property-house-wa-bayswater-120371969

 

Odd post, but interestingly FMG shares rose 6.2% today?

 

I have a friend that loves this sort of stuff, buys ugly ducklings and turns them into swans. What nightmares are mare of.

I guess if you can buy where land is scarce this strategy may work, still a numbers game. I fear too much work for %?

 

Since you have been looking, have you any ideas on the numbers, with perhaps a retain $60k Reno, sell front, build 3x2 at rear.
Just wandering if this works today in select areas ie close to city, period home.

It won't work in Mt Lawley where I live because you are paying too much for a dump and the Reno, looked at this. I guess key picking it up at bargain price

MTR

 

I have not run any numbers. IMO it is too early as the market has not settled. In a way, it's not as important to me because I will be leveraging the front house to get a cheaper block for a main residence, in an area I want to live. When I start talking main residence, numbers become less relevant. Of course the deal will still need to stack up but not as much fat as a deal for pure profit. Also, my investment partner and myself do most of the work in a reno, so that brings the reno price down.

 

@Jamie_:
There is rumor around this week that FMG is considering to sell infrastructure to overseas investors. There was similar info pushed share price up a bit last month too.
State government might relax restrictions .....

 

Thats development that old mate from SS did.

 

A bit more if you guys don't read between lines:
The house price trend in Perth is somehow related to share price of FMG (+BHP, +RIO).
Watch for the bottom and turning point from the related info.