Perth Investors- Holding or Selling

Hi all,

First post on this new platform. Was active on Somersoft but been hanging low since the old platform hung up the boots.

Anyways, thoughts for those of you holding multiple IP's in Perth market.

I have 3 there, all tenanted, all in metro on nice big blocks, however with borrowing capacity limited to probably another 2x IP's, got me thinking am I best to off load one as the market as a whole will not be doing much nor am I set to see much capital growth over the next few years.

Not keen to sell as our strategy is buy, reno, reval, tenant and hold. They cost me stuff all to hold, have great tenants and PM is really good to deal with. However with other markets providing better opportunities over the short to mid term I could be seduced to offloading one to enable further purchases in markets primed for CG.

Any thoughts or pieces of wisdom from the PC collective?

 

I'd hold - now is not the time to be selling in most areas in Perth. Especially if you can buy another 2 without selling, I'd wait. And I am waiting - I'm in a similar boat where I know I'll need to sell eventually but am not needing to right at this point.

 

Absolutely holding, avoiding any and all articles on the depressed market, and continuing business as usual. My dad used to say that when you sell, you confirm a loss - until then, who knows what's ahead. Mind you, he also bought shares in the Japanese stock market in the 90s, firmly believing that the economy had strong fundamentals. If he were still alive now I think the negative interest rate in Japan would probably bring on a heart attack.

But yes, hanging in there and waiting for better times. If nothing else, interest rates are very affordable while we're all waiting for capital gains to occur.

 

It doesn't make sense to me to sell, especially if I am holding good stock that is not causing any big strain on cash flow. Now would be the worst time to sell in addition to exit costs. Reval and take equity out and buy what you can with deposits/serviceability, but personally I wouldn't sell, and especially not in this market.

 

In my opinion it's just to late to sell for reinvesting. Unfortunately all other cities may become the new Perth. So selling a probable lemon to buy a different probable lemon it's like changing a horse in the middle of the river.

 

Depends what else you will do wit proceeds if you sell and how confident you are/are not of better potential returns than holding in given time periods.
Generally though, i would likely hold. The reason is perth is fundamentally sound eg projected pop growth. especially for medium and long terms. Its 'only' the next 5 -7yrs or so that will be painful..until iron ore rebounds or they pick up into other industries. .or bit of both..but whatever the case it isnt going to happen anytime soon...as you also mentioned, it costs u v little to hold, seem to have bigger properties in the metro mkt as well..so should deliver nicely when the market turns. ..and there will be transactional costs you will be avoiding by not selling and buying in another city...
Edit: hang on...im supposed to be hyping brisbane...sell all 3 ips in perth and buy all into brisbane

 

Perth prices are still declining from what I have seen. It could be a while before they recover. How sure you are about CG in the other markets?

 

Personal choice but I reckon you'd regret selling.

Nice new pic @Jess Peletier, look very happy/relaxed compared to the other old one

 

no offence but i think your dad's advice is terrible and can often be counterproductive.

there is nothing wrong in crystalising a loss if it means freeing up capital for other, more profitable things or even if it is simply to cop a small loss before it becomes a big one.

as for the OP, all depends on what properties you own and what you have planned for the money if you do sell. if you happen to own something that is still performing well and have plans to buy something that perhaps has copped a bigger beating and you feel has greater potential then why not?

not saying you absolutely should sell but considering it isnt a bad idea

 

Can never be sure but would just be spreading our risk profile and exposure. All good, we will just sit an ride out the storm. Fundamentally Perth stacks up so will just let time do its thing! Thanks for the feedback

 

Thanks all for your feedback and taking the time to pen your thoughts. I will sit on them and just continue to hustle! Cheers all.

 

Thats right..i have done this..sold a unit in inner city melb (for a low price) when a bit of forward lookinf forecasts pointed to massive oversupply in the pipe and used the proceeds to buy a different property in brisbane with strong fundamentals...which has returned significantly more cagr compared to had i held onto melbourne. ..and will iin the next 5 years im very sure. Its not easy to do this - requires a fair bit of conviction in your belief that B will do better than A over A,B,C time periods. Gotta really back yourself and your research and have the courage to pull the trigger not only on A but also buy B, backing yourself B will return more than A.

 

I sold 5 houses and 2 blocks of land just prior to the market turning, to reduce debt and to be cashed up. Still hold property in Perth.

I tend to agree with OP it may be too late to sell now, though it is dependent on the area etc.

Even if you were to sell today its difficult to know what market to jump into as most markets have had a good run.

Most seem to be jumping into Brisbane on this forum for growth, I just cant see prices doubling in this city over the next 2 years, especially with what is happening with tightening of finance??

MTR

 

look at my avatar....see all those pretty lights, bells and whistles....now tell me once again it isn't going to double in the next 2 years

 

I hope it does and No doubt pretty city but median for Brisbane is around $490K?, now tell me do you really think median will go close to $980K similar to Sydney at peak in 2 years time??
Also just to put it into perspective Melb median is at $700K

I expect Brissy median to increase but double would be dreaming.

 

yeah, no one expects a doubling in 2 or even 3 years time. Some suburbs will do much better than others..but still not 100% gains in the next 2 years.
100% gains in 2 years are reserved solely for sydney and perhaps glen waverley.

 

Melbourne overtakes Sydney as strongest housing market

 

perhaps..but melbourne wont double in the next 2-3 years- not even close where its at in the cycle. Neither will sydney..both are near/at/past their peaks in this cycle.
The only city that will get the closest to that ( albeit will still be far from it ) will be brisbane in the next 2 years.
If sydney was on the cusp of a boom , then id say sydney..same with melbourne...but no, both are past their strongest periods in this cycle. Relative to sydney, yes melbourne may do better as the as the article suggests in the next 2-3 years...but how well will sydney do in the next few yrs???, IMO...not going to match the CG numbers in brisbane. Neither of the cities.
Besides, i once again ask you to refer to my avatar and see the A380 with loads of mexicans cruising above the city...im not the only one who thinks this

 

I'm holding, rental yield is ok, more buckets I have when it rains the better.

 

Plus I like Colin Barnett, he is slowly turning Perth around, lots of debt but once mining kicks off again that should be under control.