WA-housing-market-experts-predict-recovery

"90 per cent certain"

PERTH'S property market has bottomed out, with some of the industry’s biggest names optimistic about a recovery over the next year.

It comes amid some positive trends in the market, including the hunt for nearly 100 rental properties in the western suburbs for resource sector migrants moving to Perth.

Top valuation expert Gavin Hegney, builder Dale Alcock, Housing Industry Association executive director John Gelavis and Real Estate Institute of WA boss Hayden Groves believe there are unlikely to be any more significant falls in house prices, which recently hit a median price of $515,000.

Others, including land developer Nigel Satterley and Urbis property consultant David Cresp, said the bottom of the market was close.

Mr Cresp forecast prices would start rising in 2018.

Mr Hegney said there were signs Perth had already commenced the first stage of recovery, which was the resurgence of trade-up buyers pushing up the price of entry level homes in aspirational areas, such as the inner city, western suburbs and the waterfront.

He said a ripple effect would soon raise the cost of homes in neighbouring suburbs as the trade up buyers were priced out of the more aspirational suburbs.

“I am 90 per cent certain we’ve hit the bottom and probably 80 per cent certain we have passed the bottom because recovery is already showing up in these areas, but it won’t show up across the board just yet,” he said.

Mr Hegney said the rental and building markets were “still in a world of pain” but recovery would follow soon after the established market.

He said it was not just the resources downturn but a confidence crisis that had caused Perth’s property slump in recent years.

“Interest rates dropped 40 per cent over the past five years but we’ve not seen a change in values at all,” he said.

“People have been waiting for the bottom.

“I would be a net buyer at the moment not a net seller but human nature is such that it’s hard to buy when you are scared and hard to sell when you are greedy.”

In a move that echoes the mining boom years, real estate agent Tonia McNeilly recently sent pamphlets through the western suburbs seeking more than 60 homes for relocation agents working for TechnipFMC, Shell, Chevron and Woodside.

Ms McNeilly said she needed 60 homes for Technip employees, 30 for Chevron and a handful for the other resource giants.

Technip confirmed it was seeking new homes but declined to say how many though Chevron denied it was seeking homes.

Mr Groves conceded it was not the first time he had picked the bottom of the market.

However, he was confident there would not be any more significant losses because there had been a clear stabilisation in recent months, including two stable quarters in the rental market after years of freefall.

Dale Alcock, one of the biggest builders in the State, said the market was still slow but there had been improved traffic and inquiries through his centres. He said confidence in the economy appeared to be improving.

“I’m of the view we are entering the recovery stage, but it won’t really get up and running just yet,” he said.

Mr Gelavis said builders were optimistic because of the demand and activity in Perth at the moment.


“We’ve come out of the largest housing boom we’ve ever had -- the last couple of years the market has dropped dramatically, but we’re down to a normalised market now, which is good,” he said.

“With record low interest rates it is a great time to be building a home, because you’ve got fast build times because of the trade availability.

“High availability of trades which means more affordability in terms of the cost of the trades, supplies and materials demand is less, time is less. You’re going to get your home completed in a shorter period of time.”

Mr Satterley said he’d never seen the market so competitive in his decades working in the industry.

“The property market never stops, things are tough, but the market never stops,” he said.

Bottom of property market 'close'

 

Classic line here

 

Hehe! I sure hope his forecast is correct, feels like such a long slump.

 

I hope so as well

 

I would hope they are right, but I feel there is still about another year to go. Nothing like trying to be upbeat and get the market moving

 

But we did have a 2 year boom in 2013-14, not all markets, started with FHB market, not higher end stuff

 

I'm not sure Perth is done falling. Picking the bottom in Ireland was a bit of a national past-time (... hmm that sounds kind of yuck) and it went on for years. But I do think Perth is an awful lot closer to a recovery and is far less overpriced than most cities - even if you're only halfway down a cliff, at least you're not right at the top.

 

Interesting times in Perth atm, property is selling but price sensitive

 

I certainly think Perth is miles ahead of most cities in terms of good value right now. It's a big, self-sustaining city and prices have come down a long way.

 

bevor these gurus talking about recovery
they should look at the rental vacancy rate in some suburbs,like my home turf in Balga (BRONX)

125 Properties for rent in Balga, WA, 6061
and they are still building like they were no tomorrow

good luck with the recovery there

 

I ignore this stuff
I focus on what is happening on the ground, we are a long way off. We need jobs and improvement in economy

 

Good time to pick up a PPOR in Perth. I have faith with Perth long term but the only concern atm is the amount of vacancies and lowish yields for anything with development potential.

 

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Wowsers !!! Majorly Over developed! Did anyone on here develop in balga? 690m2 R40 use to go for 490k-500k just three years ago and now they appear to be lucky to get $345k

 

One thing to look forward to is lower house prices will help generate this in the long run. If people can afford to buy a home, they're more likely to spend which should get the economy moving.

 

I'm in Darwin...but it's a very similar market. It's got to the point here where if it's $X it will sell. I guess you could call that a floor?

It's now just a matter of a few years as the vendors get the memo.

It will be ages by the time the stats reflect it.

 

CoreLogic data agrees to a recovery, prices are now only down 0.11% Year on year. In numbers, the index is 574.63 today and was 575.28 a year ago.. one day's movement could easily cover that gap.

This is up from -6.15% down only 5 weeks ago. Perth has been virtually flat for 12 months, and unlike last year, jobs are now heading back up and there is far less dwelling completions (i think something like 40% less on last count).

The reason people are calling bottom is because prices aren't falling anymore, and there is no expected economic shock that will make things worse than they already are.

Daily Indices | CoreLogic

 

One of the best self-serving articles written about a bounce in property prices in WA. I'd say you would do better picking a winner in the 7th at Ascot, rather than listening to our industry leaders on a sure bet in property.

 

Are you accusing real estate agents of a vested interest in talking up the Perth property market? Surely this can't be true!

 

Iron ore has fallen from $90 earlier this year to $54 this week.
Iron Ore

Not looking good for WA/perth and more downside to be expected IMHO if iron ore prices continue on this downtrend.

 

As much as i don't deny there is a problem in falling prices, there is a buffer vs. 2014. Back then, the exchange to USD was 1:1. At 0.75:1, US$50 is AU$67. There is a strong case that the AUD will fall to 0.6:1 by 2019/2020, which means US$50 = AU$83. That gives a significant buffer, and also makes aussie ore even more competitive than it already is. Companies should have far less problem remaining profitable through a price lull.