Pimping Perth already....

wow they are pimping Perth already.......

- Capital city's houses at their cheapest in 13 years

 

Pimping or an obituary?

 

pimping and saying its the next great capital growth opportunity.

don't worry they aren't the only ones.....I heard it from someone else in a presentation the other day and almost choked on my coffee.

 

I have just returned from a week in Perth and in my view,sadly, it has a long way to go yet.

I covered a fair bit of ground both north and south in my travels. The volume of new apartments/land land for sale is staggering considering the number of works currently in progress. When you also add the existing residential property for sale to the mix it looks very bleak.

Heard on the radio commercial vacancies were at 20%.

 

all the doom and and gloom is why I am circling.

 

I would delay my landing if I were you.

Signal for me would be when subi oval finds a new sponsor. (Currently domain stadium )

 

i would wait till you see any signs that it has turned the corner. Are there any ? - and being the cheapest its been in xx years doesn't count.

 

I have not seen any signs that any of markets that I am tracking have even bottomed out let alone turned the corner.

 

I'm not naive enough to expect that I will pick the bottom. I buy properties for long term hold. If I miss the bottom by a year or two, I will not be too concerned in 25 years plus time. What does currently concern me are yields and vacancy rates which are not yet conductive for investment.

I'm looking at houses not apartments as I will avoid them like the plague..hmm unless south perth gets super cheap.

On the upside Gold, Coal, Oil. Gas is all up this year.and aside that the the biggest employer in Perth is Health Services not mining. If the top of the mining boom was the peak iron ore price in feb 2011 then we are coming up to a good 6 year settling out in the Perth market. Wages have dropped yes but the unemployment rate never skyrocketed.

People are still moving to WA, obviously not in the waves of the mining boom but still comparable to the increase seen in other states. 1.2% in WA compared to the country's highest 1.9% in Victoria. Yes almost double but then again Perth is not a Detroit, its still attracting people.

I'm a contrarian investor with a long term hold investment timeframe. I'm scared by Sydney but attracted to Perth. As said, the numbers are not adding up yet, but I think its close.

 

Really? Is that common across all capital's- a high employer? Or is it just to cater for all the retirees in mandurah?
I was talking to an old dude in Perth (didn't know him, i just talk to random people) and his comments about perth hospitals was "first world country, with third world hospitals"

 

Must have been from Freo. We have some great hospitals here. Or he was just a grumpy old man

 

I like this sentiment and tend to agree. Lets hope where right

When you think about the relatively short time frame from the boomtimes to bust the same can happen the other way with a flurry of activity.

The coming spring selling season will be a tell tale factor.

 

Rubbish!

 

No he had teeth
They're ok but still not up to over east standards. Need to stop building new ones and spend money on running them and the odd reno would do. The royal is still running mission brown and original 80s styling

 

No, true story! When i was talking i thought to myself, if only Bran were here to slap him silly! i know you love your hospitals!

 

I believe you. I don't believe we have third world hospitals anywhere in the country.

 

Aside from Mike Baird, what scares you about Sydney.

 

Sydney is in the top 5 most expensive cities in the world with varying estimates of 10-12 multiples of house price to median income and yes currently 80k new people are arriving every year. As has stated elsewhere, the wealth effect means people are borrowing on their PPOR to renovate and buy new cars etc. Sydney has been expensive for a long time and may very well stay expensive as the southern hemispheres world city. I have consistently been wrong about Sydney but I see more downside potential than upside potential.

I am just of the risk mindset that I would prefer to buy low and wait rather than buy high and fret.

This sold up the road from me on the weekend. 1.9 million for 160 m2.

408 Darling Street, Balmain, NSW 2041 - Property Details

I actually dont mind Mike Baird, I voted Liberal NSW last state election and haven't been too disappointed.

 

I'm not such a naysayer on the Sydney market--sure it's had pretty phenomenal growth in recent times but rapid growth isn't always followed by a big crash. Unlike Perth, Sydney has a very diverse economy that isn't reliant on almost one industry. Sure Sydney might flatline or even have a modest pullback, but not sure all segments of the market will react the same. I certainly won't argue that Sydney isn't expensive. Sydney is a complex market and in fact to think of it as a single market is probably an oversimplification--IMHO Sydney is made up of many different markets. I would absolutely be staying away from some parts (not all parts) of the apartment market--that is a ticking time bomb IMHO full of interest only investors and oversupply. I do however think that some parts of the apartment market will remain relatively safe. Sydney is like all markets--you just need to be very discerning about what you buy. I purchased my first IP in Sydney about 17 years ago and everyone told me I paid too much and truth be known I probably did, but when I sold it 15 years later I still made a health profit. So, it would be interesting to check in on this thread in ten years time and see what we think about the $1.9 mill paid for the place up the road from you. My tip is, that in 10 years $1.9 mill won't seem too bad.

 

I agree, I don't think Sydney will crash. I just cant afford to invest in a market with what I perceive as future low/stagnant growth with very high holding costs due to the low yields.

Perth is a city of 1.5 million people. Its more diverse than people may think. Yes the mining boom had a huge effect but its not as if every second person in Perth is a FIFO worker working out of Paraburdoo.