WA Perth market 2019

Nice effort, don't let the doom and gloom get in the way of the truth, some might even call this the start of a cycle

 

Doom and Gloom is about emotions.

What is being set out is a description between the economic fundamentals of the last two decades versus the fundamentals now and into the future.

Rational, not emotional.

So far, your rationale for the future boom is SMSFs.

That’s thin gruel in my opinion.

 

Am I misquoted here?

 

The notion of ‘cycles’ as described is all pervasive and propagated by people’ who’s frame of reference is the last thirty years.


I know I’m a broken record on this point but stuff gets forgotten in just a generation or two.

Consider the lessons of the great depression: immediately afterwards policy makers went about putting laws in place to make sure that would never happen again. It took just one or two generations for those lessons to be forgotten and neoliberalism to be born.

You are absolutely correct, the cyclical behaviour of the property market for the last 30 years is indicative of **** all regarding future movements given the extraordinary economic circumstances that underpinned it: structural falls in interest rates, rising incomes, dual income households emerging, banking deregulation, government policy settings that encouraged investment and speculation.

You are also absolutely correct about construction rates. Dwelling completions and price rise in lock stop. As prices rise, so too do commencements and vice versa.

Perth is building **** all at the moment because prices are still falling.

The undersupply is coming though. Best case scenario for a Perth investor is something similar to what happened in Dublin. Massive fall in prices, massive fall in construction, credit squeeze ( all the case in Perth so far) slow economic recovery, credit squeeze still on, rents go up, prices start to follow.

 

Sorry, meant to quote chomp only.

 

Go back and read my comments again Daz, a lot more to it than what you have quoted
Do you actually own any property ?

 

Yes, and population growth.
But population growth alone won’t do it.

I do own property but that is totally irrelevant.

Does owning property make you substantially better at discussing the property market?

 

Now now, you have still missed a couple more points I had made there Daz, list them all, you need to be fair !

 

Happy for you to do a bullet point summation

 

And I'm happy not to, if your going to quote what I said do it with integrity.
Yes it does matter if you own a rental property or not, my last two rental leases shows the market changing, I'm just about to tell a couple more there will be a slight increase as well.
If you live in a studio in Midland, perhaps your view might not reflect reality.

 

From the Mike Keil newsletter

Here at michaelkeil.com we have been making the same statements for some time concerning Perth’s 2-speed real estate market. Oversupply in outer first homebuyer suburbs compared to increased demand from buyers looking to buy in more aspirational inner suburbs. REIWA’s December Quarter figures support this analysis. We also believe this is a great opportunity for investors. Low vacancy rates causing rents to increase coupled with affordable dwelling prices are leading to increased yields for investors.

 

Can Michael Kiel nominate suburbs where prices are actually rising? Not based on REIWA medians but based on corelogic hedonic indexes?

 

Trying in vain not to sound argumentative or stupid - often it's a combination of the two

I have an rpdata subscription which of course is owned by Corelogic. If I do a report on a suburb is using the hedonic index or just the same as reiwa medians?

So this is Inglewood's report.

 

Any chance you can pull up Brabham's report

 

It appears to be using raw medians and, having read the report once, is just using ‘houses’ and ‘units’. No account for bedrooms for example and not hedonic. Perhaps because its impractical for them to do that on a suburb by suburb basis or because you need a larger sample size to make it work.

So this is how Core logic explain it:


“This methodology seeks to overcome the issue of compositional bias associated with median price and repeat sales measures. The premise for this lies in hedonic theory which says that the value of a composite good, such as a house, is the sum of its components. Thus, by separating the sample of houses into their various structural and locational attributes, the differences in these qualitative factors across houses can be controlled. Hedonic imputation is a method of imputing the value of dwellings having a certain set of characteristics (but no current sales price) by observing the sales prices and characteristics of other dwellings that do have recent sales prices.”


On the other hand, the report you posted, in my opinion is still valuable in terms of showing the basic trend (would be nice if they broke it down a little further than just houses and units).


Does it bear out Michael Kiels argument? Hard to say; the median sale price for houses is slightly up but nothing spectacular but the total number of sales is down. And we don’t know anything about the quality and location of the houses.


I would say that a strong upward trend in sales is what you would want to see to declare that the market is recovering. What do you reckon?

 

Why don't you ask him?

 

Incidentally, Mike didn't undertake any analysis, so if you have any questions you would be better off putting them to Ryan...

This week our in-house economist Ryan Brierty, looks at the WA State Treasury Department's latest data on State Final Demand and business investment. The data shows a negative result for the Quarter, but the Chamber of Commerce and Industry WA forecasts positive growth for next couple of financial years. Check out Ryan's article below.

 

This is what Terry Ryder is reporting. If you have any questions then feel free to contact Terry.

Perth has been in downturn for the past four years, but no longer. All the figures show recovery is under way – vacancies down, rents starting to rise, sales activity trending up and the top-end suburbs showing good price growth.

Westpac economist Bill Evans has the property market decline wrong: Hotspotting's Terry Ryder

 

Ive said it before I'll say it again, I am seeing properties that are priced to the market selling within a week in innaloo/dview/scarbs I have not looked up any stats for these areas but from what ive seen I am sure that they have seen some growth