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Perth now second highest median property value

Discussion in 'Real Estate' started by Nigel Ward, 12th Sep, 2006.

  1. Nigel Ward

    Nigel Ward Team InvestEd

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    Apparently Perth housing prices have overtaken Melbourne to be the second-highest in the country. Median prices in Perth reportedly rose 8.2% in the June quarter 2006, to $395K ahead of Melbourne's $375k.

    Perth market surges | Property | The Australian

    Is this really sustainable? What do people think?

    N
     
  2. Tropo

    Tropo Well-Known Member

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    "Is this really sustainable? What do people think?"

    Nothing is sustainable !!
    :cool:
     
  3. Jacque

    Jacque Team InvestEd

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    When Perth is outstripping Melbourne, I believe prices are inflated and the downswing may be painful for some.....

    When it starts to pass Sydney, it's definitely time to sell and get out of there!! :D :D
     
  4. KevinH

    KevinH Well-Known Member

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    I agree its not sustainable, and I also think that a correction is now due.

    Maybe it will take another interest rate rise to knock some confidence out of the market.
    Some feedback from the Hot Property Expo held last weekend from one of the presenters, was that there are still many investors in the market there, who want to keep buying, but they are seeing Perth as now being unaffordable, at $450k for a house nd land package, and as a result Brisbane at $350k for a house and land package is seen as good value, not to mention the better rental yield that goes with it.

    But I am curious with Jacques comment about selling now....I would simply lock in your gains with LOC and invest elsewhere with the equity ( eg...Brisbane)

    Surely you're not a seller Jacque ??

    KEvin..
     
  5. Jacque

    Jacque Team InvestEd

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    Hi Kevin :)
    Well, I wouldn't say I'm not a seller- have sold a few over the years (but with sound reasoning for doing so in each case).
    Generally, my investments are all long term and I have done just what you've suggested, by refinancing and reinvesting each time. However, given the price drops I've witnessed in Sydney since 2003, the peak of the boom is always the best time to realise your profits, if you happen to need cash for whatever reason (PPOR for example).
     
  6. Redwing

    Redwing Well-Known Member

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    only $395k.. i thought we were at $420 or $455k :D
     
  7. KevinH

    KevinH Well-Known Member

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    Yes, I agree. I'm also and always a seller.
    Usually on the basis I have something else to move on to.. lenders like to see you realising a gain and repaying debt, not that its always the clever ( tax wise) thing to do.

    Kevin..
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Do they ? They seem to like me borrowing more and more :D

    I've never sold property ... not saying I wouldn't, but I don't see the point when I can draw out equity for that next investment. That requires good servicability and equity growth ... but it's worked well for me so far.

    Heck, two of what I thought were my worst properties in Adelaide I nearly sold a couple of years ago because of how much of a pain they were to manage, have just turned out to be my best performers. 142% growth in under 5 years - and they were cashflow positive from day one.

    If I had sold them, I pretty much guarantee I wouldn't have made that much money from my subsequent investments, especially after tax.
     
  9. capitalist

    capitalist Member

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    Ditto Sim's reasoning.
     
  10. KevinH

    KevinH Well-Known Member

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    They must like you better than they do me...
    I will still say that they do.
    Maybe we aren't comparing apples with apples though ......
    What I am experiencing atm is an offer for a facility of $5.7 mil and they definitely want to know how they will get their money back !!:confused: :eek:

    Kevin
     
  11. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I agree ... not apples and apples ... you are basically applying for business finance to service your developments, right ? I'm talking about investment loans for long-held real estate assets. Two totally different strategies.

    So perhaps you should have said "lenders like to see me realising a gain and repaying debt" :D :D

    You need to be careful in your posts like this to articulate that what you are doing is NOT "investing" as such, but rather, running a property development business. Different ballgame.
     
  12. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Guys,

    Just going back to the original topic if I may...

    Attached you'll find some interesting information related to the WA situation based on an HIA report I just received. You'll note that WA does actually have the second highest median price now, but that economic growth is expected to remain strong over there although coming off from current highs. Even though its falling, its still outstripping NSW which has its economic growth improving year on year.

    You can also see the dwelling starts not easing up in WA. For those interested, I've also included the current hotspots in WA.

    That last slide is interesting though. It suggests that its investors driving this activity and that they're only active in WA. Is this a case of equity trying to find a home? What happens when the party stops and all those investment dollars move to the next big thing? Deck of cards?

    What's it all mean? What do I know, I'm not an economist... ;)

    Cheers,
    Michael.
     

    Attached Files:

  13. stretchy

    stretchy New Member

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    Michael,

    Did you purchase this report or am I missing a great free HIA resource at the moment? I get their press releases delivered to my mailbox but that information you posted is much more comprehensive...
     
  14. Tizzy

    Tizzy Well-Known Member

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    Thanks for that Michael its a great site. I tried to cut and paste the link to the site stretchy but couldn't :( so I think this is it from memory.

    economics.hia.com.au

    Then on the home page theres a link to a report on builds & renos in WA 2006.
     
  15. Redwing

    Redwing Well-Known Member

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    just looking at the paper..headed "Boom leaves Perth houses more pricey than Sysdney"

    Supposedly they said on TV last night they talked about Perth being the 5th most expensive place to live in the world ( lots of media hype at the moment)
     
  16. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Its a purchased report. Its their full 55 page housing sentiment report with details on every state and territory in Australia. I work in the building industry so get access to their reports for free through work.

    Here's the actual link to their website though:

    HIA Economics

    Cheers,
    Michael.