Perth's property market - where is the oversupply?

Why even go so far ? I bought into a block of at Windsor St, Perth which cost around 505k 7 months ago with taxes for a 2 bed unit. One of then sold last week for 420k ... this was a pre committed purchase from 2013 hence could not back out ! i am hoping it will recover one day!
rents today for 390/week holding on with hope

 

Is this the armchair developer project? if so realistically it was never worth 500k imo

 

Yes Sanj, you may have even seen my unit its right in front on the right hand side as you face block. Initial Valuation came at 500k, then after few months around 7 months ago came at 465k.
You probably will be better able to put a number on it, what do you think its worth ?
2 bed, 2 bath, 1 car, 1 courtyard on ground floor.

The increased costs over the expected cost were in interest expenses which ended up being a tax deductible expense, which was a huge amount!

 

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
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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% !!!

 

I actually don't think that is too bad (surprised!). I randomly chose 19/20 Royal Street as I work just up the road. It rented for $690 per week in April 2008 - sure it went to $850 in Nov 14 so a 23% drop. But also a 23% rise in rents from 08 to 14 is a bit extreme.

Given these apartments are at "the epicentre" a 23% fall is not too bad. I would expect a similar fluctuation with my share portfolio.

 

hello Ross
its the Vacancy rate, too much supply in a market that does not need it. The rents dropping lets say are acceptable. you may know more in general do you see this vacancy rate recovering as you are on the ground there ?

 

...

 

Not in the next 12 months. You have to absorb the excess supply. And stock in the city centre is easily increased. The near city suburbs have a better chance of recovering as new supply is limited due to NIMBY's.

 

Even if we got half way in the medium to longterm that would be nice.

You are correct. Interest rates look like they are on the rise. I agree its signs of " the begining".