WA Perth is entering Boom cycle

Prices are rising but more people are leaving town ...
Ummm

 

Bob, I think when you left Perth

 

Garbage stays from corelogic.
Just bouncing around at best, any rise due to
More volume
Well above median

 

Their shizen 'daily' index has dropped 3% this month alone almost, which proves this point

 

Have had it suggested to me that if you choose a nice stable suburb in perth, where supply isn't too over the top, buy some land, develop and sell, you can still comfortably make 20% returns and sell pretty easily.

Thoughts/opinions? Should I be keen to invest a bit in some Perth developments?

 

If long term Perth is part of your property strategy, then most would agree that opportunities this year are about as good as it will ever get.

As for developing for an easy 20%, i don't agree. Things that sell pretty easily are selling below value.

 

Highly simplistic, from 2009 to 2015 Perth had strong population growth and pretty much no house price growth

 

I would like to know where. I haven't seen margins like that for a couple of years. Maybe I am looking in the wrong areas?

 

Sure.. everyone in Perth on PC is doing that right now!
Wait, no we're not...

 

But we do know where!!!! I just realized.. the secret spot (shh don't tell anyone else)

 

That's 200% margins.

 

Oh well I can't afford the buy-in anyway..
so where's this 20% stuff? I'll buy 10!

 

I will ask for more specific suburbs. The guy was a friend of mine speaking of the numbers they had been running for a few of his clients feasibility studies. He is not skilled at development, but rather at project management, so have to take it with a grain of salt.

 

Yes they do exist. See them on a weekly basis. Waiting for my titles so that I can settle on a couple of properties and I can jump back in. It is killing me waiting.

Is Perth the best place in Australia to invest, probably definitely not. Will I invest in the USA, no. Will I invest in Melbourne or Sydney, no. Hobart maybe but I do not have the time to go and spend a couple of weeks there. Without time I have no idea.

Followed Perth like a Hawk for 15 years now. Is it a good time to go again. I don't know. I'm scared Interest rates will rise and kill off the buyers and profits, I'm scared that Sydney will start tanking and Australia will follow, I'm scared that for all my gains I will lose it on the next one.

Am I going to have a crack, you betcha.

 

There are some but they aren't in great numbers and in my experience not always doing vanilla projects.
But it really depends on what you mean by stable suburb, what type of development and what your budget is.

 

Australian interest rates are going nowhere in the next 1.5 years except lower. Why? Because the millions of people in Melbourne and Sydney have no extra cash and unemployment is on the increase. The governments there will do their best to flood the cities with more supply of homes and that will keep rents low.

Sydney and Melbourne are in a cheap credit caused bubble that won't pop because the government won't allow it or it will get decimated at the polls.

In the meantime WA will get slowly back on track with real jobs and mining growth and industrial growth. The low interest environment will result in that houses will climb in value very quickly to catch up with Sydney which will drop a bit.

There has been no better time to buy in Select suburbs of Perth than now, in about 12 years, nothing as good as this.

Watch Karrinyup south, Wembley downs and Trigg.
There will be some crazy gains made there by 2018 mid year.

Let me repeat.

Iron ore companies are making more profit now then they where when iron ore price was $170. They are paying down debts and steel demand is high.
They are starting their new mines projects again and this is seen by the recent job ads for hydrogeologists and geologists.

Pert will boom again and it's based on real jobs growth not like the eastern states where it's based on aired mouth farts from the super competent pollies.

 

wondering which areas have been hit the hardest? would assume it is the premium and upper end of the market? what about the lower end - plenty of vacancies but values haven't been driven down astronomically or has it? whats the consensus on the ground - thank you

 

OK I just had a quick look at these and they don't seem to be suffering much at all - not what I would've expected. These are obviously good quality areas not far from cbd and close to water. Tenants in place, prices high, not much more stock on market than a few years ago and vacancy at about 3 - 3.5% - nothing to stress about.
Seems thta lots of people are taking the opportunity to upgrade?
If that's the case, where are they moving from?

 

I

From Guest

 

In the lower outer outer areas there has been drops but as the prices are lower they don't seem as dramatic but they are in terms of percentages. Maybe 15% in some areas?

In the $2m ++ bracket there has been some movement and the $3m ++ even more so. These are the true upgrading bargains where you can upgrade for cheaper than replacing.

The yield would suck in the $1-1.5m area but they are still seen as good value areas and are popular with families in the local private schools. They are moving from crappier houses within the suburb or surrounding suburbs.