WA-housing-market-experts-predict-recovery

Why was the Sydney market on its knees in 2012? That's the real question.

 

So, from Nov 16 to may 17 the unemployment rate has improved by a massive 1% from 6.5 to.5.5%

What's it going to take for those convinced WA economy is in the toilet to reconsider their opinion?

 

I wonder what % of that change was due to workers leaving the state who could not find work?

 

Why don't you read the stats for yourseof then?

Jobs have been created, importantly full time ones too

Number of full time jobs in WA is highest it has been since Nov 2015 and 4400 were created last month

 

I'd like to.add to the above and point out that from its peak in I think Dec 2014 WA lost around 50k full time jobs as of Nov 2016 to.be around 905k.

In 6 months since it has added about 30k jobs, so has replaced 60% of the Ft jobs in 6 months that it took 2 years to lose.

Yet the sky is still falling according to many

 

If you're buying property and holding it for 40 years, who cares if it takes another year before it picks up? Sounds like a perfect time to buy investment grade property in Perth...

 

Haha... I'm going to use that argument when Sydney's unemployment goes up. "Oh.. that's due to workers coming from other states who could not find work"

 

Well iron ore made a big rally second half last year through to March this year before coming down to lower levels and was highly profitable for miners at $90. Still profitable at $50+ but when it does get down sub $50 or $40 I reckon we will start seeing some pressure on Perth employment numbers.

Other mining commodities had a big run as well but are also coming down.

There will likely be a lag period of half year between sharp price drops in commodities and unemployment going up.

 

Make enough "predictions" and you are bound to get 1 or 2 right.

 

Not everyone is excited as you are about the employment stats...

From Alan Kohler

The employment data looked great on Thursday – 42,000 jobs, unemployment down from 5.7% to 5.5%. Hours worked jumped 1.9%, taking the annual growth from 1.4% to 2.1%.

Unfortunately it was rubbish.

The Bureau of Statistics uses sampling to estimate employment (it doesn’t actually count jobs), and has confessed that for the sixth time in seven months the statisticians have rotated the sample in favour of higher employment-to-population ratio cohorts.

The spike in employment and hours worked reported on Thursday is way out of line with all other data, especially the services PMI, which is contracting, and that’s where most employment is.

It’s out of line because the ABS data are wrong, caused by sample rotation rather than reality.

If you went by the data, the next move in Australian interest rates would be up. In fact, unless there is a big improvement in the underlying data soon, there will be another rate cut this year.

In turn, that means the Australian dollar’s strength in the second half of this week, caused by the weak inflation number in the US, is likely to be short-lived.

 

Less stock on the market, and starting to see prices move, and not in just one suburb

 

Of course, how can anyone get excited about this, seriously you need far more indicators than unemployment dropping 1%, SA unemployment just behind and their economy is pretty stuffed. That's another story I guess

I am not going to call it a recovery I will let the experts with their vested interest keep banging on this.

Until I see clear indicators such as volumes dropping, prices rising, immigration numbers growing I will just sit back and watch. There is absolutely no rush to jump in this market at the moment, when there is I will be jumping in.

MTR

 

Agreed.
I would also point out that Urbis was in the article and I usually find their sentiments on the state of play to be quite accurate and conservative. I would never put them into the spruiker territory.

 

It is hard when you compare to Sydney but Perth yield even with this slump and high vacancies actually aren't that bad when compared to eastern states yields. There is a lot less negative gearing as our "bad" yields are around 4% which is a "good" yield in Melbourne.

 

My 2 cents on it all (especially for interstate investors) is that it is probably time to be cautiously optimistic for Perth.

Good current buys:
- a new PPOR (and rent out old PPOR until more market increase if you can)
- a blueish chip retain and build (sub 7km from city)
- something super ugly with little appeal that can be turned around
- a bluish chip small house under $650k sub 7km from city

What is not good:
- areas 20km or more from CBD with immature ammenities and plenty of stock
- any area that had a blanket density change and is just chock full of same same vanilla over supply (ie Balga)

There is always things that will break those rules but that is my general sentiment at the moment

 

agreed, but the difference is Melb market has been booming, the CG is what people have gained which is massive, that is what we don't have in Perth. We have low yields and flat/falling market dependent on suburb/area

 

Hopefully you can see this article

Supply issues likely for apartments

Like anything when people stop building, as they have for the past 18mths, whether it is apartments or houses, it will inevitably result in an undersupply in another 18mths.

Often it is boom or bust when it comes to supply. The boom times inevitably create the oversupply which cause a panic like reversal. Life would be so much easier if we just had a nice stable market with a nice small consistent growth.

 

hmm i read somewhere historically sydney/perth move counter cyclically - any truth in this...

 

Fully agree. I watch Perth CBD listings closely. They peaked well into the 300's last year, which combined with East Perth, there was around 700 listings between them.

Today there are 176 and 199 listings in Perth and East Perth respectively, so a near 50% contraction. At the start of the year Perth 6000 had ~235 listings, so the market has tightened 25% already. This makes it the second-most constrained CBD after Sydney (122 listings), even less listings than Adelaide at 314.

On note of jobs data, its nothing new that the ABS stat is notoriously unreliable, but it does hold a correlation and that's what counts. I personally consider the stat more of an index than a count of jobs, and indexes are all about watching trends. If ABS has fiddled their sample groups, this would affect all states. That means WA's performance relative to the eastern states is vastly improving. WA has just this month recorded its highest ever count of employment, narrowly eclipsing the October 2015 record and significantly up from the September 2016 low. Say what you will about the accuracy of the statistic, it doesn't change the trend that employment in WA is improving.

 

Agreed @JL1 . Statistics can be useful for following trends even if the samples might not be the same as other data sets or fully accurate. It's like jumping on the weight scales at home and it says you are 5kg lighter than the gym scales. As long as you constantly weigh yourself with the same scales you can confirm weight gain or weight loss.