WA Perth is entering Boom cycle

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

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  1. dabbler

    dabbler Well-Known Member

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    I see people say similar things quite often, but where are these Perth suburbs that have dropped so much ? I have not seen any, worst I have seen is about a 10%-15% over 2 years.
     
  2. Perthguy

    Perthguy Well-Known Member

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    Belmont, Cloverdale and Kewdale for a start. But this only affects people who bought somewhere around the peak (Dec 14/Jan 15). I bought before that and the price has not dropped back to my purchase price.
     
  3. dabbler

    dabbler Well-Known Member

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    Looks like about 25% over 2 years, so back to maybe 2012 sort of pricing ?
     
  4. Perthguy

    Perthguy Well-Known Member

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    I would say that sounds about right. Looks to me to be around 2012 pricing. Interestingly there are still many properties that are over priced. Even at those levels. The issue is the area overheated... particularly development potential sites. I was on the ground when it happened. Prices got ridiculous.
     
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  5. dabbler

    dabbler Well-Known Member

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    You need to spend some time in Sydney looking at property where there is no dev potential to see overheated :)
     
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  6. Ald

    Ald Well-Known Member

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    It never ceases to amaze me how this culture and mentality of finding a sucker to sell something to is something so prevelant and glorified here in Australia. Essentially you are a hero if you managed to sell something overpriced to somebody and then watch him struggle with it.

    Bad business culture here.
     
  7. stockt12

    stockt12 Member

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    Yep, must be a lot easier for you to do as you please on Mars.
     
  8. MTR

    MTR Well-Known Member

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    Guys the honeymoon is over.... it wont just be Perth that will be effected.

    Link attached.....Business Insider Australia, 2 December..... extract below/link

    Australian economic growth looks set to slow sharply


    Only three months after celebrating 25 years without experiencing a technical recession, second only to the Netherlands in terms of an uninterrupted period of economic growth for a developed nation, growth looks set to slow sharply, or worse, in the September quarter.

    Retail sales volumes, dwelling investment and business capital expenditure all contracted during the quarter, seeing expectations for economic growth scaled back substantially.
     
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  9. ellejay

    ellejay Well-Known Member

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    For those that paid down debt on their assets the income will keep rolling in regardless.
     
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  10. MTR

    MTR Well-Known Member

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    Yes of course, but rents in Perth have been hammered we are talking 10-20% drop this will significantly impact on income, oversupply.....and some banks are raising their IR.

    If investors are managing their debt levels great, but not sure this is what investors do in the main, most go nuts when markets are booming and continue to access equity and buy....buy.... buy.
     
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  11. ellejay

    ellejay Well-Known Member

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    True, I wouldn't like to be relying on Perth rent. Will be a lesson in there for some who think capital cities are the only safe investing option.
     
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  12. Perthguy

    Perthguy Well-Known Member

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    I agree. Capital cities has their good points but can't be relied on to provide stable rental returns through all markets. People need to plan ahead for times when rental returns maybe aren't so good.

    I don't know across the board but rents overshot in my area in Perth during the boom. Some of us could see that rents would inevitably fall back. One of our properties is coming up vacant and it looks like it will get $280 per week rent. In 2014 it was rented for $440 per week. The extra rent from 2014 on went into an offset account to cover us when the market dropped. As a result, we are well covered.

    While I doubt other areas in Perth are as bad, rents have dropped and people who didn't plan ahead and cover themselves will be feeling it.
     
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  13. Ross Forrester

    Ross Forrester Well-Known Member

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    I think it is also good to take a medium term outlook. Perth has always been a more volatile market as a result of the commodities element and always will be.

    That does not mean it will be bad forever. It is bad now. The future for the medium term will be great.

    So if I think medium I am saying 5 years time.

    Short term maybe not so great. A few false starts as we bounce along the bottom.

    But a volatile market requires a more conservative approach with reserves in place.
     
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  14. ellejay

    ellejay Well-Known Member

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    I'm a bit embarrassed to say, given all the negative comments, but I'm looking to buy a block with development potential in Perth. I know about the risks but I see some good buying opportunities at the moment (and a lot of not so good). It could well bite me on the bum but I'm happy to take a longer term approach to get in the door while I can afford it.
     
  15. MTR

    MTR Well-Known Member

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    that's why we have oversupply, even when dropping price, sometimes it's a case of how low will you go..seeing this in Mandurah
     
  16. Ross Forrester

    Ross Forrester Well-Known Member

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    Never be embarrassed. Celebrate every step and acknowledge the success you have in making a decision.

    Every successful person I know has had it tough and made a lot of mistakes. The thing is that they have created a situation where they could make mistakes.

    Human nature is to buy at the top of market and sell at the bottom. You are clearly going against that.

    Well done.
     
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  17. ellejay

    ellejay Well-Known Member

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    The herd is buying in Brisbane but I'm not seeing it myself at the moment. No criticism and I'm happy to notch it up as a mistake in the future if it doesn't work out. Each to their own.
     
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  18. MTR

    MTR Well-Known Member

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    me too, because the market is fragmented in other words it's a mixed bag, not boom.

    ....I think Tassie is th dark horse and perhaps worth finding out what is actually happening on the ground
     
  19. ellejay

    ellejay Well-Known Member

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    I'm not really interested in Tassie. Not saying it can't grow but not in the timescale I'd like (given my age) and Hobart wouldn't meet my yield requirements. Not my strategy to pump my own money in and wait for a small rise over the years. Could be heavily investor influenced. Just my very own individual opinion and not wanting to debate it as I'm very happy to be proven wrong. :)
     
  20. MTR

    MTR Well-Known Member

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    if the wheel ain't broken don't fix it:)
     
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