The falling knife stops and quivers .... the turning point ?

Perth - Just don't rely on charts for the full picture...… "falling supply" is a broad statement, and will absolutely not apply for all areas, I expect many areas still in oversupply.

But is it better today than yesterday? perhaps, but only certain areas, and the right product, inner city for example and some of the western suburbs are doing OK. But don't mistake this for a rising market, its not. Properties that are in demand still need to be priced correctly.

I am sitting back and watching, its not a buy for me yet. Not saying I am right, just what I am comfortable with in Perth market atm.

 

Going micro-markets you will always find exceptions, in any city at any stage of a cycle. However a micro-market (outside of a fundamental change such as land re-zoning) can only move so far before the price difference to the adjacent suburb or product becomes too wide. At that point either the price will fall, or the adjacent product will also get caught in the lift. People were making 20%+ in a year from a standard buy and hold in Melb and Syd 3 years ago, good luck finding that now. Only a macro view will tell you if the overall market is tight enough for one product to lift another, and macro views are also the best gauge of market sentiment.

Perth rental listings are down over 40% from peak and consistently falling each year. I track a range of suburbs from across the city and in pretty much all of them listings are down. Even if the current rate slows they will still be under 2014 listing levels by year end. This is in an environment where new stock is consistently slowing and population growth rate consistently increasing, so there is little argument for Perth not seeing broad based increases in rent. throw in rate cuts, and without question it will be more expensive to rent than buy.

I would have said the time to start looking at Perth was about a year ago. I have friends looking in some key development areas and they are already seeing 10%+ increases is sale prices. My Perth position is highly leveraged and cash-flow positive, so there is no downside for me to hold. For someone looking long term to taking a position in the Perth market, now is the time with virtually zero downside to acting on current opportunities. all indicators point to a lifting market, "when" not "if". No other markets are moving, and you can quite easily be cash-flow positive. so now while sales listings are high is the time to make 10% on a low-ball and snag something special. as soon as the market starts moving, these opportunities are gone.