WA Perth Market 2015

Discussion in 'Where to Buy' started by HD_ACE, 19th Jun, 2015.

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  1. Perthguy

    Perthguy Well-Known Member

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    I would not try to develop now. It would be a cosmetic reno, rent and hold for me. Especially considering the wicca St townhouse tonight could not generate any real interest. I would not like to be selling that product in this market and that is exactly what I would build (just not now). Besides that, I really think things will get worse before they get better.
     
  2. mrdobalina

    mrdobalina Well-Known Member

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    That's a decent price (for the buyer).
     
  3. Aconis

    Aconis Well-Known Member

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    So the townhouses got passed in? What sort of prices were did they get to? Thanks in advance.
     
  4. mrdobalina

    mrdobalina Well-Known Member

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    A friend recently purchased a slightly bigger block on a quiet street in Rivervale for $685k, and he thought that was a bargain.

    Were there any other successful sales at the auction yesterday?
     
  5. Perthguy

    Perthguy Well-Known Member

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    From memory, the first was passed in on a vendor bid of $600k. However, I could be wrong as I left all my notes at home :(

    I didn't make it very far in. It was loud, chaotic and not very interesting. Every bid was like extracting teeth. They got down to $500 bids when properties were clearly nowhere near reserve. They would start an auction, put it on hold, go to another property, come back to the 'on hold' property, put it on hold again etc. etc. Chaos! :) Then 90% of properties were being passed in anyway.

    I figured I would just wait a couple of days and look up all the properties to find out what happened.

    It was interesting to go though. Big crowd. Very few genuine buyers. The buyers were razor sharp. They had good knowledge of the properties and prices. Hence so many passed in. Not sure what happened after I left but I probably got 1/3 the way through with 2 sucessful sales from 15 properties. Unless things really picked up after I left, I doubt they will run such an event again in the future. It would not have been cheap to run.
     
  6. Perthguy

    Perthguy Well-Known Member

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    From memory, we saw 2 sucessful sales total from 15 properties. I would have to check my notes though.
     
  7. Big Daddy

    Big Daddy Well-Known Member

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    Thanks for the update.
    On a side note heres another interesting graph
    RBA2.gif
     
  8. Perthguy

    Perthguy Well-Known Member

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    Interesting @Big Daddy. That's quite a low % in real terms. However, given lenders exposure to residential mortgages, I guess this would be a risk of the % grew too high. I wonder how hight that % has to go before lenders start getting into trouble?

    The other side is that there are a significant amount of defaults with record low interest rates. It makes me wonder what might happen if interest rates increase?
     
  9. wogitalia

    wogitalia Well-Known Member

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    Was it more the vendors still wanting peak prices or no buyers bidding?
     
  10. Perthguy

    Perthguy Well-Known Member

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    Yes. lol.

    The bulk of properties I saw just had very little interest. The ones that had some interest finished bidding at below market value, even in this market. And vendors wanted even more than that.

    Perth buyers hate auctions. Most of these properties should have simply been put on the market at a price and allow people to present offers. Not everyone can turn up to an Auction on a Wednesday at 6:00 PM. With 39 properties on the cards, who knows how long the auctions took. With so much stock on the market, there are easier ways to buy a house ;)

    Seriously though, some of these properties have been on the market 6-8 weeks. That is a total waste of marketing time, where agents could have been doing home opens and taking offers. Now we are bang up against Christmas and many people will stop looking at properties until mid Jan. IMO this is a disgrace. I understand that the Agency wanted to try something new. My problem is the timing, which is very poor.
     
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  11. Big Daddy

    Big Daddy Well-Known Member

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    Good points @Perthguy. Did they collect information from non bidders? Maybe they just wanted a list of hot buyers so they can harass you to buy something else .

    According to the graph it shows a low percent of defaults but notice WA is leading the pack
     
  12. Perthguy

    Perthguy Well-Known Member

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    Actually no. They didn't collect any info. I should actually sign up with some of these agents, considering I am looking at buying opportunities. Considering they didn't even get names to spam makes the whole thing look like even more of a joke. It certinaly wasn't good marketing for the agency. Walking out, I said I would never list my property to sell with them.

    Yes, I did notice that. It is unsurprising given the ridiculous prices some people paid for their properties in the boom combined with high unemployment. I was reading one listing where the purchasers bought a property to develop and have now both lost their jobs. They are selling up rather than defaulting though.
     
  13. Perthguy

    Perthguy Well-Known Member

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  14. Perthguy

    Perthguy Well-Known Member

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    Results from the mega Auction "event" are trickling through. Possibly 5 out of the 39 properties sold at Auction? IMO that is a very poor result.

    181 Alexander Road, Rivervale, WA - sold at auction for $500,000
    70 Wicca Street, Kewdale - bidding reached $600,000
    16 Surrey Road, Rivervale (BEING LIQUIDATED*) - bidding reached $810,000
    * not being liquidated if it did not sell at that price​
    75A an 75B Wicca Street, Kewdale - bidding reached $600,000
    Unit 54/12 Tanunda Drive, Rivervale - bidding reached $550,000
    Unit 40/11 Tanunda Drive, Rivervale - bidding reached $410,000
    4 Hope Place, Redcliffe - bidding reached $480,000
    7 Cueesun Court, Redcliffe - bidding reached $470,000
    Unit 10/ 276 Belmont Avenue, Kewdale - bidding reached $350,000
    267 Robinson Avenue, Cloverdale - bidding reached $610,000
    3/25 Hassett Street, Cloverdale - bidding reached $250,000
    9/68 Fisher Street, Belmont - bidding reached $350,000
    67 Ashburton Street, East Victoria Park - Sold At Auction
    8/152 Great Eastern Highway, Ascot - Sold Under Hammer
    3 Worth Parade, Ascot - bidding reached $550,000
    30/68 Fisher Street, Belmont - bidding reached $430,000
    53A Kooyong Road, Rivervale - Under Offer
    47 Helmsdale Loop, Butler - Auction

    16 Surrey Road, Rivervale is a nice house in the nice part of Rivervale. Not sure it is worth $810,000 though.

    16 Surrey Road Rivervale WA 6103 - House for Sale #120174961 - realestate.com.au

    This is really not a nice market to be selling a home you paid $875K for in Jan 2013. It just shows how much the market has dropped.

    Property Report for 16 Surrey Road, Rivervale WA 6103
     
  15. Perthguy

    Perthguy Well-Known Member

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    I was running a development feasibility for 75 Wicca Street with my mate at lunch time.

    Original block was bought for $680K + $100K (est) site works and servicing = $780k
    est development cost $900k - remember these are high end, 260m2 under the main roof

    With other costs and holding costs we estimated they would want a min. $660k sale price.

    I just found out that one was listed for sale at $719.9K on 27 Oct 2015

    Property Report for 75 Wicca Street, Kewdale WA 6105

    Also, the $660k did not include the agents fee, so that would push the sale price closer to the $719.9K. So, at a guess I think we were not too far wrong :p
     
  16. soggy

    soggy Well-Known Member

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    Good stuff @Perthguy . Appreciate the coverage and info from the auction.
     
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  17. wogitalia

    wogitalia Well-Known Member

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    I actually quite like that house. Be interesting to see where it gets to price wise.

    Thanks heaps for the auction results, much appreciated. Seems like that region has really cooled off based on those bid levels.
     
  18. Aconis

    Aconis Well-Known Member

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    Thanks heaps @Perthguy . Very interesting how it went. Or how it didn't.
     
  19. Perthguy

    Perthguy Well-Known Member

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    I agree. Prices overshot for sure. Combination of FIFO demand, Belmont rezoning, Stage Govt. multi-dwelling policy etc. Now that demand has dropped right off, the inevitable correction is in full swing.

    Example: I recall this proprty selling back in the boom: sold in May 2013 for $765K.

    Property Report for 203 Fisher Street, Cloverdale WA 6105

    Now on the market for "From $750,000" :(

    reiwa.com - 203 Fisher Street, Cloverdale
     
  20. Big Daddy

    Big Daddy Well-Known Member

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    Heres an article from a different source explaining the same thing. I would assume vendors will start listing realistic prices and be more inclined to accept low ball offers (only works with cash strapped investors and homeowners without much equity in their PPOR). If the next interest rate movement is up then their could be more pain

    Western Australians are falling behind on their mortgage repayments at a higher rate than borrowers in any other state, according to new Reserve Bank of Australia data.
    RBA assistant governor financial markets Guy Debelle said borrowers in NSW had the lowest rate of home loans in arrears or in default, while WA had the highest.
    The findings are based on new data acquired by the RBA that measures the value of loans on around 2 million homes, about one-third of mortgaged properties in Australia.
    Mr Debelle said it was perhaps not surprising that WA had the highest value of loans in arrears or in default, given the figures were consistent with recent economic performances of the states.
    He tempered the news by noting the overall arrears rate was actually fairly low.
    According to the RBA, about 3.1 per cent of home loans in WA are in arrears or in default.
    About 1.9 per cent are in arrears of up to a month, about 0.5 per cent are in arrears of between one and two months, about 0.25 per cent are in arrears of between two and three months, and about 0.5 per cent are in arrears of more than three months or in default.
    Tasmanian homeowners had the second highest rate of loans in arrears or in default, at just under 3 per cent, followed by next highest Queensland, then South Australia and Victoria.
    NSW recorded the lowest rates of loans in arrears or in default at about 2.2 per cent.
     
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