WA Perth is entering Boom cycle

Discussion in 'Where to Buy' started by Ald, 12th Nov, 2016.

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  1. MTR

    MTR Well-Known Member

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    Good points.
    This is also a drop in the bucket even if it takes off? We will probably need much more to start a boom again.

    Though I acknowledge there are some amazing deals to be had in Perth, but also disappointed that rents have fallen back so much.
     
  2. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Definitely agree that it is a drop in the bucket but a positive one none the less.

    Anecdotal evidence suggests rents still have a downwards pressure which makes it all the more important to choose wisely.
     
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  3. D.T.

    D.T. Specialist Property Manager Business Member

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    Timing of that works well for future plans ;)
     
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  4. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Do tell?
     
  5. JL1

    JL1 Well-Known Member

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    Fantastic news. I do think the negative media rhetoric around resources gets carried away sometimes, its like they think that the world suddenly decided it doesn't need iron anymore or something. Ore trading at US$80/tonne is huge, clear of 30% above most mines' break-even points.

    The project sounds similar in scale to Roy Hill with the train line and port works. If nothing else it would provide enough work to completely offset the remaining job losses forecast by the Department of Employment (~14,000 more losses in mining by 2020).

    This project would be critical for the government to demonstrate a new approach to managing mining investment. A lot of large engineering companies have lost capability in the mining space and moved their knowledge centres over east (speaking from experience). The government will need to demonstrate consideration for all design and construction elements of the project, and ensure that benefit remains within the state where entirely possible.
     
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  6. MTR

    MTR Well-Known Member

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    There are some amazing buying opportunities in Perth at the moment, shame though the development sites are not stacking up and I am not interested in land banking.

    Perfect time to upgrade primary residence though
     
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  7. Perthguy

    Perthguy Well-Known Member

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    I have not run numbers on development sites for a while. What is the issue? Buy price too high? End values too low? End rents non-existent? All of the above? :)
     
  8. MTR

    MTR Well-Known Member

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    Last time I checked both

    I also read post by @Big Daddy on a deve purchase that was finding t hard to stack, assuming this is the norm in today's market?
     
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  9. DoubleD

    DoubleD Well-Known Member

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    Just been stung a $60 week tent reduction with a long term tenant.

    Tenant on $460 they asked $400 I said market rent is $440 and I'm happy to drop to $440. They said no $400 is the max they can go.

    Did the numbers on kicking them out at best when you take inconsideration 1week vacancy @ $400, two week letting fee @800 it's going to cost $1200 to sign up a new tenant.

    The reduction in rent of $40 over 6months will cost me $960.

    My best option would be to take the $400week new lease for six months and reassess the market then. Once I finish a couple of deals.
     
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  10. MTR

    MTR Well-Known Member

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    Unfortunately rents have not improved due to oversupply

    Also if investors can't sell they rent more rental stock, a vicious circle
     
  11. JL1

    JL1 Well-Known Member

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    If you don't mind me asking, what area is the property?

    By my calcs, June will be the time that rents start to pick up pending interstate migration coming back to square. The 6 month lease sounds like a good option, I did the exact same with my tenants in Highgate.
     
  12. DoubleD

    DoubleD Well-Known Member

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    Joondalup, will be a good time to cut their back garden in half and stick a granny flat in.
     
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  13. WesternRat

    WesternRat Active Member

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    is 1 week vacancy realistic in today's market? no idea what rental demand is like, and obviously depends on suburb/property type, but i would expect several weeks/months?
     
  14. WesternRat

    WesternRat Active Member

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    talking of due diligence, what's with those new skyscrapers and world trade centre thing on the east side of Perth station/McIver station that is currently in awaiting approval? seems like some big players are looking to drop big money in Perth, does this signal the bottom of market?

    New World Trade Centre Perth's biggest
     
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  15. Perthguy

    Perthguy Well-Known Member

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    Depends on the competition and the price you list at. My tenants in Cloverdale vacated a 3x1 a week before Christmas. I checked the market and there were 26 3x1s listed for rent in Cloverdale. I was hoping for $300pw but listed at $280 because I didn't want to house empty over Christmas/New Years. The house was on the market for 3 days before being leased. Total vacant time was 7 days.
     
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  16. Perthguy

    Perthguy Well-Known Member

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    I don't think it represents the bottom of the market. These things take a while to "ripple out". 2017 could see the bottom of the market in Perth though. Hopefully! :)
     
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  17. MTR

    MTR Well-Known Member

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    Also we had a boom in 2013/14, generally speaking some cycles can take 7 years before we see an upward swing???? But agree, we are some time off yet as our economy is not in great shape and this needs to improve before we see property prices start moving in the right direction.
     
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  18. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Different times call for different approaches. Well done @Perthguy

    I also rented a property in 1 week back in August last year with a similar approach.
     
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  19. WesternRat

    WesternRat Active Member

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    yup good work - there is a 3x1 on my street near cloverdale that has been listed since late last year with nary a home open...
     
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  20. chesterfield

    chesterfield Well-Known Member

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    If you are calling 2013/14 a boom then I would call 2015/16 a bust of which both were neither, merely trends within a flat cycle from the end of the 2000-2007 property boom. These two foreign investment projects (megamart WTC towers and Iron Ore mine with rail) looking likely to happen and we should start to see market improvements in WA by the end of 2017. Supply of good PPOR and development sites already disappeared from the inner city/suburbs market. Good luck to all those who have purchased and are land banking or living on a decent site, good times around the corner.
     
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