WA Perth market 2020

Discussion in 'Where to Buy' started by Redwing, 1st Jan, 2020.

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  1. Leslie

    Leslie Well-Known Member

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    Are we back to same as 2008 when we struggled to find a place to rent?
     
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  2. MTR

    MTR Well-Known Member

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    Means rents will keep rising
     
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  3. Scaphella

    Scaphella Well-Known Member

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    Come March 2021 the rental market is going to go bonkers..
     
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  4. Rex

    Rex Well-Known Member

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    Nobody has any idea what % change is going to occur throughout the geographic markets over the next year, let alone 3 years. Not the big banks, not the pundits, nobody. Only 3 months ago the consensus from all the majors was that there would be ~10%+ price falls nationally, Perth would see prices continue to slide and that Melbourne would actually fair better than Sydney. And of course Sydney & Melbourne would take off again next year, once again leaving Perth and the other minor capitals in the dust. Now that's all been turned upside down by the events of the last couple of months.

    In mid 2019 every mainstream economist said the Sydney & Melbourne price recovery would be anything but V-shaped - and yet that's exactly what it was (until Covid hit). And let's not forget that NONE of the major economic commentators predicted the property price crash that occurred in Perth over the past 6 years, even though it seems clear as day that it would happen when looking at all the data in hindsight.

    Anything could happen in the next few months to turn everything on its head, for Perth and other Australian markets. Not just Covid, but government actions, e.g. who would have predicted $45K worth of building grants, or the state government extending the Covid rental laws as cover for the upcoming election? All I know is that Perth continues to be positioned stronger than all other capitals to weather this storm and conditions continue to align for boom conditions in rents and property prices.

    In fact you can almost use these housing market predictions from big institutions as a guide to particular scenarios that what won't happen as they are invariably so vanilla and never correct. Every time I see an article quoting an 'expert' predicting positive but constrained price growth for Perth versus inexplicably better performance forecast for other cities, I get just a little excited.
     
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  5. JKB

    JKB Well-Known Member

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    Not too sure about numbers in 2008, Last time I saw them in two thousands was 2012/2013 and people were seriously struggling to find a rental, rents were about 25% higher than where we sit now.
     
    Last edited: 21st Sep, 2020
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  6. MTR

    MTR Well-Known Member

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    Low interest rate environment and soaring rents means holding property will be the way to go. Developing will just make the rental returns More attractive​
     
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  7. Ketsle

    Ketsle Well-Known Member

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    Spot on!

    Whilst im all for some positive news, I cant help but laugh when anyone makes market predictions about the next 2+ years let alone in the next week. Didn't newscorp run with a promo about a year ago predicting the doom and gloom of "house prices to drop 40%" in sydney and melb after they took a piece of an interview completely out of context?
     
  8. MTR

    MTR Well-Known Member

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    Thats why you probably best not to hold unless numbers stack up, negative gearing is too painful.
     
  9. Rex

    Rex Well-Known Member

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    How about this corker from only last month?! From a "Professor of Property" no less - that was the article that convinced me Perth will be OK. When the academics have swung around from lamenting property affordability for years (whilst prices and rents continue to slide) to predicting market doom & gloom, you know you've reached the end of the cycle...
    https://www.watoday.com.au/national...dire-signs-for-investors-20200805-p55itz.html

     
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  10. JL1

    JL1 Well-Known Member

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    This biggest issue with all these forecasts is and always has been that they don't make realistic assumptions about where population is heading.

    Taking population changes at an individual age level looking at 18-45 year olds due to migration and deaths only (does not include people coming of age, which is typically fairly consistent along with birth rate):
    • since 2016 WA has had a negligible level of change. in 4 years (2016-2019) this age group has grown by only 3,036 people, all of that growth in 2019
    • In that same period, this age group has grown by 304,225 people in Victoria; consistently 70-80k people per year
    • WA's net interstate migration has been negative since March 2014, where as Victoria's has been at its highest inbound levels on record
    For WA, to close borders is to have a negligible impact on change in population of this key age group. We have seen the benefit as the people who formed part of that out-bound migration over the last 5 years return home.

    For Victoria, they just lost the growth of 80k people per year in this age group alone. They also are losing the outbound migration of people heading home, who had formed the historical record of inbound migration in years prior.

    For housing, that means no real downside for WA, just a kickstart as people return home. Victoria is now bleeding 80,000 new buyers/renters per year until Covid is under control. That means no need for new houses, which means no need for construction jobs, which was previously (coupled with international education) what underpinned the record population growth. So Victoria is essentially going to keep bleeding value until Covid is under control.

    I get that banks do not want to make wild assumptions about population changes, but any first year economics student can look at the supply demand on this and realise that WA is not going to follow the downward spiral of the eastern states.
     
  11. Ketsle

    Ketsle Well-Known Member

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    I see what you did there ;)
     
  12. strongy1986

    strongy1986 Well-Known Member

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    Ok so im going to mention a dirty word....

    'Mandurah'

    Can someone convince me why i shouldnt buy an r60 block for low/mid 200s, rent about $300?

    I have been looking in Perth but it seems i am a year too late to get any real bargains anymore. For the same money i would be looking at a house around Rockingham (Waikiki) or around Gosnells/ Armadale

    Would i be right in saying that last perth boom pretty much all suburbs benefited and the southern regionals (such as Mandurah) missed out?

    Appreciate any feedback

    Cheers
     
  13. thatbum

    thatbum Well-Known Member

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    Because they might not be worth any more than that in 10 year's time. And rent for less.

    That's what's happened to anyone that's owned them for around the last 12 years.
     
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  14. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    it is the unemployment and meth capital of WA. You are just inviting trouble, stress, risky growth prospects and hepatitis just going to a home open :p
     
  15. Redwing

    Redwing Well-Known Member

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  16. Redwing

    Redwing Well-Known Member

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    On a positive note, it's only one more sleep for locals until Christmas ;)

    I don't mind the place

    upload_2020-9-21_19-44-33.png

    upload_2020-9-21_19-43-42.png
     
  17. strongy1986

    strongy1986 Well-Known Member

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    Yep so if Perth has a boom then you believe Mandurah will miss out again?

    I can't see how it can, especially when you consider how cheap money is to borrow at the moment

    Just quietly Geelong used to be a fair old hole (some would say it still is)
     
  18. strongy1986

    strongy1986 Well-Known Member

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    Redwing, I take it your a local?

    Any positive signs around town or just a nice place to buy a canal block?
     
  19. gach2

    gach2 Well-Known Member

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    Im not local
    Never been to Mandurah
    But just been doing my research only

    Im guessing its one of those places you buy and hold and the rents hopefully cover the mortgage. I still think the median prices of Mandurah needs to double before it ever becomes viable to develop the land. If that ever happens your r60 might triple (don't think it will perform that much better) considering every block is r60-100

    On another note any general feedback on Warnbro Waikiki etc mainly on the western side of reed st/Warnbro sounds ave? Some affordable stock walking distance to the beach and serviced by a train line that can make commuting to cbd bearable (45 mins)?
     
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  20. Ketsle

    Ketsle Well-Known Member

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    Where is the block?

    Mandurah and similarly surrounding suburbs still has plenty of land to be developed. So if you are buying to develop and sell the end product, why would anyone buy a smaller townhouse which im assuming is closer to the city centre, when they could probably very easy get a bigger house on more land for probably the same price? You just have to ask yourself what is really going to drive the price growth there. On a side note, i dont mind visiting mandurah. Has some really nice spots and some really nice holiday houses. Unfortunately it gets a pretty bad wrap for a reason.
     

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