WA Perth is entering Boom cycle

I completely agree with what you are saying but be careful when using "all houses". Development went nuts in these two areas and as those smaller properties such as units and apartments began to appear, the median price was driven down.

Also you will have one sale of a development block, then 3+ sales for the units that have been built. $700k for dev block, $400k x 3 for units = median price of $400k.

Simply this could be a reflection of the ratio of apartments/units sold to houses sold, which is increasing over time.

 

I am afraid not. The asking prices for dev blocks compared to the boom has deffo gone down by more than 10+% in many suburbs. Belmont, Cloverdale have been hammered a bit too much. I remember people paying Rivervale prices for Cloverdale stock - for what? A few REAs got filthy rich in the process too.

 

Fair point. Exactly what you said. Large blocks with houses were bought to build apartments, units, houses and townhouses. The smaller houses would have definitely skewed the stats which is why I specifically compared devvie site prices my post. Comparing development sites of similar size with the same zoning on a per square metre answers your question. The introduction to market of cheaper, smaller houses does not completely explain the decline in median house prices. The per square metre rate for devvie sites has dramatically.

At the peak in Belmont, R20/40 properties were selling for up to $858/m2. The most recent R20/40 development potential property I can find sold was July 2016 for $634/m2.​

Cloverdale was similar. At the peak, R20/14 properties were selling for up to $826/sqm. Whereas recently, a potential development site sold for $621/sqm.​

I was at the auctions. Crazy does not describe the prices in Cloverdale at the peak. So much for the rational market. Less than 12 months later, good devvie sites in Rivervale were selling for less. I followed the market for a while and some of those peak Cloverdale devvie sites were subsequently sold at a loss. This is not good and not something I want to see as a property investor.

 

Hammered a bit to much could translate into buying opportunities for investors if they can find a deal that stacks up

 

Maybe but I feel like correction is proportional to overshoot. So hammering seems like a not-surprising outcome for something that shot up too much in the boom. I feel like Belmont/Cloverdale are stabilizing at sensible prices these days but still quite a bit of dev stock (either bought in the last year or so and waiting for market to pick-up) or on the market. All of which will affect any potential developments down the track.

What you are doing is a much safer bet.

 

Hopes for new $5b iron ore mine in Pilbara

 

That would be seriously smart of you. See gamble way and McLintock way and walk to the beach and see the primary school at the end of gamble way, it's one of the most desired public schools now, and then the girls high school st Mary's is just by the footy oval near the bike path and there are few schools in Australia that have such beautiful grounds and buildings. Excellent teachers and the kids are just so kind and normal.

 

Man people are so dumb, do you know what Median is?
It's half sold for less half sold for more.

You could have 10 houses selling for 1.1 million, 1 selling for 1.11 million and 10 houses selling for 2 million and you would still have a median of1.11 million.

The median price is loved by real estate agents because it keeps their pricing rises non transparent.

Get boots on the ground pal.

 

Global glut of supply????

Iron ore price is at $80 and the Brazilian mines are running full blast there is no glut of supply anymore. This is the new normal. Iron horse will fluctuate between $60 and $110 for the next 3 years.

 

The only numbers that stack up is to do a demolish and build of a luxury residence in Karrinyup south on Gamble way.

Buy a block at $1 million if someone sells, then put a 400k mansion on it and pocket 100k. Sure profit may seem small but it's risk free and if you take a good builder you don't even think about it.

Let's see who knows Perth.

Who is the most reliable quality home small builder in Perth who you can just give your money too and don't worry about it till they call and say it's finished?

 

$400k mansion????? Even if you could get a very very competitive builder you would be getting a 220-240 sqm turnkey McMansion.
As it would be a large block I would probably go a really nice single level house and you'd get a lot more bang for buck.
I have a few builders who I trust but even the best require involvement.

 

#l00l

 

There's only one street in Perth where a demo stacks up? And 400k for a large two storey....would be VERY basic with low spec finishes.

 

You can only make money developing in Perth if you are building in South Karrinyup. In other news Malcolm Turnbull is a charismatic and effective leader, President Trump is measured and sensible and Putin is a kind and caring leader. Bernardi will make Australia great again!

 

At least we can agree on something.

 

If you're buying in south karrinyup, does that make it an instant $1m equity? Since the $1m block is actually worth $2m and you bought it at below market value?

 

I typed in South Karrinyup on realestate.com.au and nothing come up, same with Karrinyup South? Is it even its own suburb or do you mean just the south of Karrinyup... surely it deserves its own name after all this discussion about it

 

I'm pretty sure it's the new estate in between Dalkeith and Peppy Grove.

 

I think its time to upgrade and buy your primary residence I cant afford these swanky areas

 

The part of Karrinyup, south of Karrinyup road is planning to secede from Australia and become it's own country - like Hutt River Province. So not only will you do well but probably not pay CGT, GST or any other tax. Be prepared to carry your passport on you to get in and out though