Perth most expensive city by Xmas

Rough_Trade · 7 November 2006

Hello Smurf

As I live in Perth and am experiencing the boom first hand I will attempt to answer some of the statements you have posted.

Smurf1976 said:
I challenge anyone to convince me that a house in Perth is really worth nearly TWICE as much as a similar house in Adelaide and more than one in Brisbane, Melbourne, Canberra or Hobart. Or any regional centre.

Its worth whatever the market is willing to pay no matter how absurd the price may be.

Smurf1976 said:
What, exactly, does Perth have that none of these other cities has?

A shortage of Real Estate - A large influx of immigrants – Lowest unemployment in the country.

Smurf1976 said:
As I said, there's nothing "wrong" with Perth. Like any city it has it's good points. But I don't follow the argument that land there is so much more valuable than land in Adelaide, Brisbane, Canberra or Melbourne (or soon Sydney).

Its primarily down to supply and demand. Look at what happened to the price of bananas when the storms hit Queensland. We are now paying 3 to 4 times the price for a inferior banana.

Perth has been affected by numerous price rising factors all at once. Eg -

Home buyers clashing with Investors – This was becoming prominent before the boom.

Buyers offering well over the asking price for property - Automatically sets the price bar higher for the next property put on the market in the same area.

Unethical Real Estate Agent practices – Scare tactics, revealing offers, creating off market auctions. The boom has exposed the true character of some agents.

Increased borrowing power – A result of the resource boom & higher wages.

Shortage of land – A result of the state governments incompetence, red tape & head in the sand mentality.

And to top it off it happened to the number 1 obsession of most Australians.

Cheers
Roughie.

bingk6 · 9 November 2006

Smurf1976 said:
So am I saying that Perth house prices should be comparable to Hobart? Not necessarily but the notion of Perth prices being higher than Sydney makes about as much sense as 16 year old CEO's running dot.com companies circa late 1999. A product of highly unusual circumstances which by definition are unlikely to endure.

Totally Agree !!! IMHO, you'll have to be blind if you can't see the bubble forming in Perth. The smartest thing a Perth resident can do is to sell up in Perth at these absurb prices and buy something in Sydney, while they still can. A once in a lifetime opportunity.

Shame there is no index available on Perth residential pricing, love to short that , another once in a life time opportunity, I reckon.

Freeballinginawetsuit · 9 November 2006

bingk6 said:
Totally Agree !!! IMHO, you'll have to be blind if you can't see the bubble forming in Perth. The smartest thing a Perth resident can do is to sell up in Perth at these absurb prices and buy something in Sydney, while they still can. A once in a lifetime opportunity.

Shame there is no index available on Perth residential pricing, love to short that , another once in a life time opportunity, I reckon.

Totally agree!, just keep the home you live in though as I wouldn't move to Sydney in fit.

Rough_Trade · 9 November 2006

bingk6 said:
The smartest thing a Perth resident can do is to sell up in Perth at these absurb prices and buy something in Sydney, while they still can.

There was a news story the other night reporting that some investors in Perth are selling their investment property/s and moving the money into their super funds. Better tax wise and less fees involved like stamp duty, rates, property management and maintenance which comes with property investment.

Smurf1976 · 9 November 2006

Rough_Trade said:
Hello Smurf

As I live in Perth and am experiencing the boom first hand I will attempt to answer some of the statements you have posted.

Agreed with your points Rough_Trade. Anything is worth right now what the market will pay etc.

But I'm thinking about the long term. 5 or 10 years into the future. It just doesn't make any sense to me that land in Perth is so much more valuable than land in Brisbane, Melbourne etc and is now comparable to that in Sydney. Sure, people are paying it so that's the going rate at the moment. But I just don't see how it represents anything other than an over priced asset when viewed over the longer term.

I must emphasise that I have nothing against Perth as a city, I'm just commenting on real estate prices there.

Smurf1976 · 10 November 2006

Rough_Trade said:
There was a news story the other night reporting that some investors in Perth are selling their investment property/s and moving the money into their super funds. Better tax wise and less fees involved like stamp duty, rates, property management and maintenance which comes with property investment.

The thing about bubbles is that they don't need a "trigger" to burst as many assume. Sentiment just rolls over and at some point buying pressure falls below selling pressure and then the slide is underway.

My expectation is that it will be the bursting of the Perth bubble, not the falls in Sydney, which ultimately trigger falls elsewhere.

Most Australians in the regions and smaller state capitals have the impression that Sydney is just "different" in so many ways that whatever happens there doesn't really affect them. But once the real estate slide hits Perth, that denial is over. The slide is from East to West and it's not purely a Sydney issue like so many things are seen as being. All of a sudden, the threat is real that "this could be me".

I fully expect that to be the tipping point nationally. Buying pressure is already clearly sagging with interest rate rises etc whilst local real estate agents (at least in Hobart) confirm that more and more "fire sales" are occurring where people simply have no choice but to sell. Plenty of reports indicate similar problems in Melbourne.

It won't take many extra sellers to tip the balance firmly in favour of falling prices. If even a couple of % of investors in the other states panic when Perth goes "pop", that ought to be enough to tip the balance.

chops_a_must · 10 November 2006

wayneL said:
The *only* benefits really. There was the relaxed lifestyle in days gone by, but that is now long gone.

In a few months, I will be out of this state for good; it sucks!

We also had a kick **** art-rock scene. Now that the Tucker B's have left, the market has been swamped by generic ring-raider rock like EOF and Eskimo Joe.

Rough_Trade · 10 November 2006

Smurf1976 said:
Agreed with your points Rough_Trade. Anything is worth right now what the market will pay etc.

But I'm thinking about the long term. 5 or 10 years into the future. It just doesn't make any sense to me that land in Perth is so much more valuable than land in Brisbane, Melbourne etc and is now comparable to that in Sydney. Sure, people are paying it so that's the going rate at the moment. But I just don't see how it represents anything other than an over priced asset when viewed over the longer term.

I must emphasise that I have nothing against Perth as a city, I'm just commenting on real estate prices there.

Hello Smurf

By no means was I justifying the high price of Perth real estate or defending the city itself. I totally agree with you that the prices here are over valued. What people are paying for at the bottom end of the market is just sad. Just wanted to give my point of view as some of the things going on here can’t be experienced unless your in the middle of it all.

Cheers
Roughie

Freeballinginawetsuit · 10 November 2006

chops_a_must said:
We also had a kick **** art-rock scene. Now that the Tucker B's have left, the market has been swamped by generic ring-raider rock like EOF and Eskimo Joe.

I like Eskimo Joe, been to a couple of their shows at the Settlers Tavern in Margaret River and they sounded good, maybe I'm just a generic ring raider groupie!.

Freeballinginawetsuit · 10 November 2006

Chops, that not the go on ASF

chops_a_must · 10 November 2006

Since the Grosvenor closed thanks to out of towners, I have nothing else to do on a Thursday night but stir ****.

wayneL · 10 November 2006

Freeballinginawetsuit said:
Chops, that not the go on ASF

Yeah we're not prudes, but we have to draw a line somewhere.

Cheers

chops_a_must · 10 November 2006

Must be an accountant...

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