WA Perth is entering Boom cycle

You're jumping on the karrinyup syndicate too.i wish you luck

 

Perth property in 12 months will be pretty much the same is it is now - some up some down but otherwise flat.

You have to soak up excess supply before prices move.

 

I'm not jumping on anything, just supporting the comments made about improved sentiment in Perth over the last few months. I actually prefer suburbs in the City of Vincent where there has been notable recent improvement.

As a Perth engineer I am just looking forward to continuing to work in Sydney and milking the tunnelling infrastructure boom (same thing the Easter states folk did in the mining boom) before the spending cliff falls hard in 2-3 years. By that time it would be too late to invest in Perth

 

The recent commodity price spike has been mainly due to china trying to reduce coal output by shutting mines and reducing working days to 276day /yr + infrastructure stimulus spending in 1H 2016.

China has already finished with the stimulus and is now trying to control the rampant property markets in major cities. And they will likely have to reopen some coal mines and increase the work days back to normal at some point or risk protests in the poorer provinces. In which case coal and iron ore prices would drop as fast as they have gone up.... China gov has really crazy one off policies which they will just implement willy nilly as a reaction to a problem.

OnG space price up was due to speculation of an oil production freeze, however this doesn't seem likely at all despite big talk from OPEC and RUssia lol. everyone still happily pumping away. Iran just announced record output.
Iran Tells OPEC It Raised Supply by Most Since Sanctions

Biggest risk if FED ups the interest rates progressively our banks will have to follow too.

Lets not forget the apartment glut in Perth.

Just like for stocks, this could very well be a "dead cat bounce" for the economy in Perth.

 

Uuummm. I don't think so.

A momentary spike in the iron ore price is not going to add $2b to the state government coffers.

 

If Trump sets the US on an aggressive infrastructure spending program of roads, rail, bridges etc, they'll need lots of steel, meaning WA and it's iron ore could be strong beneficiaries... we shall see...

2017 is going to be an amazingly interesting year . What will Trump be like? Will he set the world on a path to a tarriff driven trade war? Or will he be a deal maker? Will the RBA be forced to cut as money flees the US looking for a safe haven? Will that force the regulators to further constrain lending to prevent an asset bubble? What will happen when all the apartments across the country start finishing and the settlements are due? Will it be a bloodbath or will it all land on its feet? Will Sydney correct? Will Perth start to recover? Will Brisbane finally do something to justify all the hype? Will Adelaide be the dark horse, or will it be the larger regionals instead like Orange, Bathurst, Shepparton, Wagga, Albury/Wodonga etc?

 

I just prefer to focus on the opportunities that present today

 

Actually I have lived in WA for a decade there are a handful, of places I have not been. I know thousands of people there. Chatting to them , there has been a improvement since 2 months ago.

I expect they will start talking about oakajee harbour again , there are too many mines out there that require the port.

 

From speaking to a few of the mining boys I caught up with recently coal price is going up because China, Korea, Japan, and Vietnam have built several new coal power stations that are incredibly efficient and more are coming. They all got a scare with the earthquakes damaging Japanese nuclear reactors. The Japanese president basically said that it came close to Japan ceasing to exist. Korea and Japan have shut down their nuclear plants and are building many tens of power stations.
Queensland coal mine that were mothballed are being taken back on line. Hunter valley is also going bonkers
.

Plus stainless steel production is going up and they need high calorific value coal. Thus price is going up.

 

Are you a BA?

 

Apartments will be cheap, house will be expensive. Apartments will be empty houses will be full.

People wait years to buy a property in that pocket of Karrinyup in the vicinity of Gamble way. Whe one appears. They snap it up instantly.

 

What's a BA

 

Doesn't matter. It's all about 'Gamble Way' and he knows 'thousands of people just in Perth' zzzzzz

 

Like for like with apartments - will a 550k apartment at Leighton Beach outperform a $550k house in Ellenbrook? Clearly a house in a suburb will always outperform an apartment in the same suburb but it is a different price point altogether.

 

Barnett Advisor

 

I think Perth many flatten out a bit, but per comments, don't think this will be a sustainable uptick just yet.

If Trump carries through he will slap a massive tarriff on steel from China, Japan, and South Korea.. And guess where most of our raw IO and coking coal goes to get turned into steel? And even if Trump can carry through with his stupid rheotoric, the FOB price to the US means we won't be selling that much more of it to them either. Most of it will probably come from Brazil as it will be a lot cheaper to the US.

And .. because we sold Australia up the river, the WA government will receive stuff all royalties anyhow, so it will not flow through to the rest of the WA economy unless it lasts for many years.

 

You know I generally find a very narrow range of differentiation in prices. Especially apartments. The apartments with high prices usually have something like a view.

I had a discussion recently, somebody suggested move to a country town get a job and save money as houses are cheaper. But they are not really that much cheaper in country towns. One can easily find almost like for like prices between a place like Newcastle outer suburbs and whoop woop in the country with no doctors and hospitals.

 

China actually have plans to shut down their coal power plants to reduce pollution. In fact they have so much overcapacity now they are trying to find ways to sell the excess energy..

Japans nuclear reactors have been going back online this year and more should go online next year as well reducing the demand on Gas and Coal.
Japan Reactor Restart Signals Latest Step in Nuclear Rebirth
[With Ikata No. 3’s restart, three of Japan’s 42 operable reactors are online. Twenty-five in total have applied to restart.]

A detailed overview of Japan's nuclear reactor situation.
Nuclear Power in Japan | Japanese Nuclear Energy - World Nuclear Association

There are actually 2 coal prices. One for coal power plants and one for steel plants( thermal and metallurgical) . Its the price for coal for making steel (metallurgic) that has had steep price tripling but this is expected to be unsustainable and is due to China's sudden extreme gov policies and property/infrastructure spending. thermal coal price for power generation has only risen ~50%+

http://www.abc.net.au/news/2016-08-24/coal-price-spike-on-back-of-reduced-chinese-mining/7776904

It is the initial big wave of mining investment that usually starts the boom where the mines are.For this to happen, prices will have to stay high for longer before the mining majors decide on any new significant spending on new mines/projects.

 

my fellow traveller, its time to forget about the govt, Feds, or councils here. They serve someone else, not the people. It's liberating when you let them go like a ballon in the wind. They are a vexation on your life. Don't say we, when describing what the govt does, much of what they do is deliberately kept vague, and it's not something that normal good people would do.

I walk through life now knowing what I was once warned about by a very influential businessman that every body knows, is true. He said to me, "Australian businessman and politicians are all crooks, every last one of them, avoid their contracts their offers and have as little to do with them as you possibly can. Their business practises are there to ensnare you and hidden in the fine print is hell on earth for you. From your employer, to your grocer, to your kids nanny each of them just wants to rip money from your pocket without considering the value they deliver, that's business in this country. But you don't be like that, don't be like them and don't play their game, then you will be so different that you will make a fortune"