WA-housing-market-experts-predict-recovery

Discussion in 'Property Market Economics' started by Scaphella, 13th Jun, 2017.

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  1. hammer

    hammer Well-Known Member

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    Interesting blog post today from Jon Giaan, Basically saying that in order for banks to meet their new APRA limits they are now going for higher quality applicants....and they are doing this geographically (i.e a borrower in Syd will get chosen over a borrower in Perth..)

    @euro73 @Jess Peletier You guys seeing anything that backs this up?

    Banks vs. Perth Property (a clash to keep an eye on)

    It is not that Perth is getting hit with the same stick as Sydney and Melbourne. It’s that APRA gave the banks the stick and the freedom to hit whoever they wanted.

    For the sake of loan quality, they decided to hit Perth – hard.

    That has the potential to create a self-fulfilling prophesy in some of these markets that are struggling.
     
  2. MTR

    MTR Well-Known Member

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    Agreed.
    If its a development site you may still need deep pockets, but I am seeing some absolute gems at the moment.

    In the boom of 2013-14 we were fighting for development sites, the major re agents would sell them to their developer mates and the smaller developers did not get a look in, you needs to become friends with re agents. This is always the case in boom times, now we have choice, but you still need to be able to hold and with IR on the rise may make it a little harder.
     
  3. sanj

    sanj Well-Known Member Premium Member

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    I happen to strongly agree with the general sentiment, and there are posts on here by myself since mid last year stating the same...
    I'm yet to see anything that convinces me I'm wrong and that the price rises I've seen in particular segments and the positive signs I've seen are either incorrect or will be fleeting
     
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  4. Redwing

    Redwing Well-Known Member

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    Says it all

     
  5. euro73

    euro73 Well-Known Member Business Member

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    What I'm seeing is an almost forensic level of scrutiny being applied to any I/O deal at any LVR. Banks are clearly trying to find ways to say NO to INV deals that are normally YES deals. With a 30% quota available to I/O , this is to be expected.
     
  6. sanj

    sanj Well-Known Member Premium Member

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    No it doesn't considering Gavin hegney has a long history of getting things more right than wrong, does not sell properties and his firm, which he no longer runs day to day, doesn't deal with the public all that much, ie those who might be more easily influenced

    Or we.could just dismiss the opinions stated in the article entirely instead of judging them on their merits
     
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  7. Redwing

    Redwing Well-Known Member

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    There seems to be a oversupply of property in new/outer areas, drops in rents, increases in vacancies, people leaving and a lack of confidence and real estate transactions

    At the Peak WA had an influx of 80,000 people in a year

    The newspaper was talking it up a few days ago also, there is a large disparity between Perth and Melbourne now - In saying all that, I hope it does turn, but does this mean $50 billion dollar projects again, or just a slow creep being underpriced in comparison to the aforementioned. I wonder what the impetus for near term growth will be, I don't think you need to rush to get in at the moment

    Perth was near on Sydney prices a few years back when Sydney had its seven or eight years of flatlining
     
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  8. MTR

    MTR Well-Known Member

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    I am just watching, not ready to jump in yet, too early for me

    I take these reports with a grain of salt as there is clearly vested interest and talking up is the norm
     
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  9. Ross Forrester

    Ross Forrester Well-Known Member

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    A lot of this comes to your risk profile.

    I would prefer to lose the opportunity to make 10% rather than lose 10%. Some guys are closer to the action, they are professional investors and will pick it - they have a different risk profile.

    I do know that bigger blocks around Subi and Shenton park are selling within 3 days for good numbers.
     
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  10. Ross Forrester

    Ross Forrester Well-Known Member

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    I like the opinion of Warwick Helmsley and Satterly.
     
  11. Bonz

    Bonz Well-Known Member

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    The property market in WA is not too bad. You need to be careful where you buy and sell, basically do some real due diligence rather than simply buy anything and hope that the market goes the right way for you.

    Plenty of brownfield development opportunities, the biggest problem however is securing bank finance. This problem is caused by the banks taking a cautious approach to lending on the east coast and applying the same constraints in the west. That said present the bank a detailed proposal evidencing cost return servicabioity and the like which is empirically supported and they will finance you.

    The last thing we need is a big upswing in prices.
     
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  12. JL1

    JL1 Well-Known Member

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    Satterly and PEET are the two opinions that i don't pay much attention to, which i admit is somewhat arrogant of me given their massive experience.

    My reasoning though is that they are invested in new build housing, and i think that is like taking advice from Melbourne apartment developers about price movements. Given the massive oversupply and cost reductions in houses in the newer areas, its no wonder that trying to sell a H&L package is so much harder to make profit from. I've read both of these guys forecast a return in 2018, and IMO the more constrained parts of the market (ie. inner) will see movement sooner.
     
  13. Redwing

    Redwing Well-Known Member

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    Perth was forecast to overtake Brisbane and become Australia's 3rd largest city by 2030

    ABS also mentioned this

    In Series B, Perth is projected to experience the highest percentage growth (187%) of Australia's capital cities, increasing from 1.9 million people at 30 June 2012 to 5.5 million in 2061. The population of Perth is projected to overtake that of Brisbane in around 15 years time, when they both reach 3 million people in 2028. The second highest percentage growth (118%) is projected for Brisbane, increasing from 2.2 million people to 4.8 million people. In 2061 Darwin is projected to increase from 131,900 people in 2012 to 225,900 in 2061 (71%).

    Perth to leapfrog Brisbane as third largest city in Australia
     
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  14. RetireRich101

    RetireRich101 Well-Known Member

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    rental yield is so bad in Perth? newish 3 bed dwelling renting for low $300, some are under $300?
    You cant even rent a 60m2 2 bed granny flat in Blacktown.
     
  15. MTR

    MTR Well-Known Member

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    Fir me these stats are meaningless

    This is a long time between drinks I am only interested in what is happening now and whether I can make money now.
     
  16. Perthguy

    Perthguy Well-Known Member

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    Looks about right to me.
     
  17. Cruskits

    Cruskits Well-Known Member

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    Wouldn't look to closely at the Iron Ore prices to predict where Perth house prices might head... Perth's property market practically doubled in no time back around 2003 - 2007 and we averaged about $60/tonne
     
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  18. Cruskits

    Cruskits Well-Known Member

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    Down to 5.5% today.... I know these stats have copped a hammering in regards to their accuracy in the last couple of years, but they are we have got. I feel like a minnow talking to you about property MTR and am in awe of what you have done especially in the US. Just throwing some conversation around in regards to the Perth jobs market...
     
  19. Bonz

    Bonz Well-Known Member

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    The iron ore price has nothing much to do with property prices in Perth. Even if the iron ore price halves in 12 months the mines employees wages don't halve in the same period.

    In any event how many workers are there in the iron ore mines, not many as a percentage of the work force and getting less each year with automation of the sector. The Mining sectors impact on property prices in Perth is negligible.
     
  20. Kangabanga

    Kangabanga Well-Known Member

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    I would like to know where your $60/ton average comes from.

    in 2003 iron ore price was $13+ and in 2007 $36+ and peaked at $180 in 2011 before starting a downcycle to $42 in Jan 2016.
    I would say thats about double the price from 2003 to 2007 and when property boomed in Perth.
    Iron Ore - Monthly Price - Commodity Prices - Price Charts, Data, and News - IndexMundi

    and we all know what happened to perth property market after iron ore prices started to really come down from end 2013 from $130 to $50? Thats about when the recession in Perth started

    Perth's housing slump 'a lesson for Sydney and Melbourne'
    ["Western Australia was infallible in 2006 and 2007, we were really booming," he said.
    "We had a second kick along in 2012, and at that stage the Sydney and Melbourne markets were pretty well on their knees.Today Perth is on its knees.]
     

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