Interesting reading in last weekend's SMH in an article titled BOOM AND BUST ON THE HOMEFRONT. Wanting to keep the lid on rising inflation, the head of RBA, Ian McFarlane, warned another increase in rates was likely to do just this, before the end of this year. With various experts having their two cents worth, the general consensus in the article was that Sydney is a "spiky" market with sellers who purchased three years ago experiencing the most pain on resale in today's market. AMP economist, Shane Oliver, believes that " Parts of Sydney are paying the price for the boom conditions in Western Australia", adding that "It's a real challenge for the RBA at the moment. A false move could trip the economy over unnecessarily". So, all you WA investors- stop spending money on Perth property and get yourselves over to NSW! We need you
Gotta be kiddin' right Jacque ?? Not sure what Shane is alluding to ..... The state of the Sydney market is a result of factors that are Sydney and NSW specific. It was all cool and trendy to be buying property and bidding at auctions up to 2003, so much so that whole TV programs were devoted to it. But if the fundamentals behind the hype don't stack up, then the fall of the deck of cards would have to be inevitable.. WA is going thru' a catch up phase ...with the state govt taking advantage of their swollen coffers to engage in infrastructure projects to bring the place into the 21 century. Basic things like arterial roads, rail links, rejuvenation of tired suburbs, replacement of state housing, etc. Its simply catch up time... The fact that there is a twin turbo'd super charged resource sector driving it helps of course. But as far as concerns by the RBA about tripping up the economy, I would think that its coming regardless. Interest rate rises are on the way as far as I am concerned, and the sooner the better to get the pain over and done with, clear the decks, and then we can start a new phase, and rebuild. I don't know of too many Perth investors who are still buying in Perth. The feedeback I am getting is that there are lots of Eastern States investors buying in the Perth market. The WA investors I am in touch with are looking to diversify and are buying over East. Some of the places I am currently targetting include, Mt Isa, Sunshine Coast, Karratha, and Fiji. Perth is definitely not on the radar... Kevin
I believe what Shane meant was that the RBA lifting rates to cool the WA boom is affecting prices in Sydney adversely. That's all, really. I currently have a WA client myself who realises the wisdom of investing outside his state. As for investing in Perth, I concur with you that it's too late. The ship has sailed
Well as far as I am concerned, the old adage of "Go West young man" ( or woman) should be expanded to go west, then go NORTH. There are some serious property shortage problems going on up here. I seriously wonder if the WA market is even on the radar of the RBA. Surely their reasons for rate movements are more to do with national economic indicators such as inflation, rather than whats happening in WA.... I dunno' ..I guess I'm just having an extra cynical day. Kevin
