WA Perth Market 2016

That's good news for Collier Homes @thydzik. As far as I know, they were ok?

 

Call it what it is: Western Australia is heading for a recession

Real Gross State Income



"State Final Demand is a measure of domestic demand in an economy. It measures the total volume of goods sold for consumption or investments within that state, but excludes export sales".

Western Australia
218 421
209 777
-4.0%

5220.0 - Australian National Accounts: State Accounts, 2015-16

 

I agree.

 

Moody's warns of more house price falls
Moody's warns of more house price falls

A new gloomy forecast has emerged for Perth house prices, with global economic research firm Moody’s predicting further declines in 2017.
A CoreLogic-Moody’s Home Value Index report released today predicted Perth house prices would fall by 4.5 per cent in 2016 and a further 5.8 per cent in 2017, before a slow recovery begins in 2018.
Nationally, house prices were forecast to rise 7.9 per cent this year and 6.6 per cent in 2017, with Perth and Darwin the only cities where capital values are expected to fall.
Rents in Perth are also sliding, according to Moody’s, down 24 per cent from a peak in 2014.
Moody’s said recent rallies in commodity prices, particularly a rise in iron ore futures, had provided a temporary reprieve for Perth’s housing market, but said it did not expect commodity prices to continue to rise at their current pace.
Continued gains in Sydney drove the robust national forecasts, with a 15.8 per cent lift in median prices in 2015 to be followed by an 11 per cent increase this year,
Moody's predicted Melbourne's housing market to start to stagnate due to incoming supply, with growth of 10.4 per cent to be followed by a 6.6 per cent rise in 2017, with declines in median prices expected to begin from 2018.

 

A 6% fall in 17 will be OK. A lot of people are thinking another 4% to 8% fall with 2018 picking up. I hardly think we are going to a 30% cliff some are picking. Also remember that when a herd keep on saying the same thing it is hard for somebody to go against them.

We all know we are somewhere close to the bottom. You will not pick the exact bottom as we have sub markets in sub markets.

The lower house prices are making it easier for staff to live here and making it more attractive to live here. Overall the cost of doing business in Perth is getting lower and it is making us more competitive.

Medium term the growth here will be fantastic.

 

That would actually be perfect for me.

 

Yep more carnage especially if the triple threats happen this december.

1) Italian referendum Renzi loses -> Italian bank run -> Euro contagion? 2011 Greece default scenario all over again?
2) OPEC talks fail -> Oil goes south to $30 again -> Commodities crash again.
3) FED rate rise -> Further unwinding of carry trade and increasing credit spreads -> more rate rises from our banks.

 

I will be looking for a PPoR block or old house for redevelopment in 12 to 14 months time so I am hoping prices continue to trend down. Even with recent price falls, I still can't afford to buy anything reasonable in the Bayswater/Bedford area where I am looking

 

hi Perthguy, i hope you don't mind me asking, but what kind of budget do you have for your PPOR and do you intend to pay it off in full before continuing with investing?

 

For a block and build, budget would be 500k to 550k depending on servicing. While I am living there, I have some funds to offset the loan to reduce interest. I am planning that if I blow my borrowing capacity down the track, I can move out and rent it out. Perhaps one day Perth will boom again so I might be able to release some equity by selling up and moving back to a shared house so I can keep investing. That's my vague idea anyway.

 

so just partially paying it off and investing on the side then? I'm really stuck on whether I should buy a property or stick to rentvesting

 

Depends on your income. My plan is while I am living there to have funds in an offset account. Then use those funds for investing when I move out and turn it into an IP (if I have to). That said, I haven't checked that I have the capacity to service the loan. I was going to check closer to the time and just keep saving up if I need to. I don't even know what my next project is after that so it's a bit hard to plan that far ahead.

 

We are already in a recession

 

Perth housing market sits in the red alone

Perth housing market sits in the red alone

Perth is now the only capital to record a year-on-year fall in house prices, and was the weakest-performing city in the three months to November, according to new data.
But Perth dwelling prices did improve 0.6 per cent last month to a median dwelling price of $490,000, according to CoreLogic RP Data.
On an annual basis, every capital city except for Perth is now showing a positive annual trend in dwelling value growth, with Darwin last month returning to the black.
Perth home prices are 3.4 per cent lower year on year, and 1.1 per cent lower in the three months to November.
The data follows a gloomy forecast for Perth house prices by a CoreLogic-Moody’s Home Value Index report yesterday, which predicted the city’s house prices would fall by 4.5 per cent by the end of 2016 and a further 5.8 per cent in 2017, before beginning a slow recovery in 2018.
Nationally, CoreLogic’s data today showed a 0.2 per cent rise in the combined capital city dwelling values in November, although CoreLogic head of research Tim Lawless said the monthly gain was the softest result since December last year.
“The soft performance across the combined capital city reading was attributable to a 1.5 per cent fall in the Melbourne index, while all other capital cities recorded a positive month-on-month result,” he said.
“Delving into the Melbourne results in more detail showed that unit values were down a larger 3.2 per cent in November, while Melbourne house prices declined by 1.3 per cent over the month.”
“The November results also show a rise in transaction numbers across the Darwin market over recent months, supporting the moderate improvement in market conditions that the hedonic index is showing.”

 

I'm still not seeing much of a drop in the northern suburbs I've been looking to buy in for the past year. Rentals are soft in the area though.

 

That's amazing! I was looking for my mate today in the Queens Park, East Cannington and Beckenham areas and I was shocked at how much prices have dropped there.

 

This is a leasing summary from LJ Hooker, Perth .. watch the rents that have dived.
Only a unwise person would add to the supply right now, i have 2 units in Perth and regretting my decision of ever getting into that market. only option now is hold for long haul
######################################################
We leased the following properties this month:
2/131 Adelaide Terrcae East Perth $420 per week
103/148 Adelaide Terrcae East Perth $520 per week
38/155 Adelaide Terrcae East Perth $560 per week
29d Berwick Street Victoria Park $350 per week
18 Briald Place Dianella $450 per week
19/7 Bronte Street East Perth $415 per week
310/122 Brown Street East Perth $350 per week
17/128 Brown Street East Perth $380 per week
1/45 Burt Street North Perth $350 per week
87a Caledonian Avenue Maylands $350 per week
11/32 Eastbrook Terrace East Perth $550 per week
11/7 Fogerthorpe Crescent Maylands $475 per week
12/14 Forrest Avenue East Perth $500 per week
4/102 Goderich Street East Perth $320 per week
909/112 Goderich Street East Perth $190 per week
9/3 Greenway Street Perth $395 per week
14/3 Greenway Street Perth $300 per week
16 Haig Park Circle East Perth $650 per week
6/273 Hay Street East Perth $370 per week
16/29 Hill Street Perth $320 per week
21/121 Hill Street East Perth $360 per week
9 Kalkite Close Ballajura $335 per week
63/81 King William Street Bayswater $210 per week
116/81 King William Street Bayswater $250 per week
2/12 Leila Street Cannington $310 per week
10/26 Little Walcott Street North Perth $300 per week
6/288 Lord Street Highgate $320 per week
16a Lowes Street Cloverdale $410 per week
134 Marine Terrace Marmion $350 per week
7/41 Mount Street West Perth $750 per week
1/69 Murray Street Perth $350 per week
69/101 Murray Street Perth $350 per week
19/20 Royal Street East Perth $650 per week
66/20 Royal Street East Perth $380 per week
18/50 Royal Street East Perth $900 per week
28/44 Seventh Avenue Maylands $260 per week
37/308 Stirling Street Perth $240 per week
205/106 Terrace Road East Perth $320 per week
1/126 Terrace Road Perth $230 per week
40/132 Terrace Road Perth $430 per week
83/132 Terrace Road Perth $400 per week
16 Tringa Rise East Cannington $520 per week
1/38 Waterloo Crescent East Perth $250 per week
3/38 Waterloo Crescent East Perth $190 per week
26/18 Wellington Street East Perth $390 per week
47/35 Wellington Street East Perth $420 per week
38/40 Wellington Street East Perth $330 per week
66/125 Wellington Street East Perth $420 per week
2/537 William Street Mount Lawley $200 per week
52/537 William Street Mount Lawley $180 per week
6/65 Wittenoom Street East Perth $500 per week

The REIWA vacancy rate rose to 6.9% with 10,563 properties listed for rent.
The median rent dropped $15 to $365 per week – I predicted the figure would move in last month’s email. This time last year the vacancy rate was 5.6% and median rent was $400 per week with supply at 9,345. Two years ago supply was just under 6,200 – This is a rise of 170% !!!

 

Sorry to hear this, I have been warning investors that Perth is not a buy.


I feel your pain

 

guys ,look at Gladstone ,same thing will happen to Perth,no different to me

what i noticed it that's the rentals for houses 3 bedder ,in Perth greater region for 250 bucks is increasing every week

 

No it won't, you're talking metro vs regional. Perth is taking a hit for sure, but %-wise the impact will be much less than in Gladstone. I can't see Perth's housing prices dropping by more than 50%...