My wife & I have looked at well over 100 properties in the past 3 months, have put out over 10 offers & 4 written offers and they have been realistic offers not even 15% below market value. Anyway, the thing is not one has bitten, the market is getting even hotter. I’m seeing properties sell before the first home open just like it was 18 months ago.
Properties that need over 30K spent on them are going for the price that they would if already renovated.
Do we sit tight and pray for the market turn-around or jump in for the last 12-24 months ride?
Perth investors with experience, what would you do?Sol,
You mean to say that there is actually activity outside of Sydney, Melbourne and Brisbane ?? But how can that be ?? [blink]
All of the journo’s in the SMH, Age and Courier Mail say that the property market in Australia is overheated and has been heading down and likely to go down further ?? Maybe when they say the ‘property market in Australia’ they are actually referring to only a major section of one of the markets…people however get sucked in to their rhetoric and believe what they write.
My experience with the Perth residential market, most vendor’s who are not desparate, will usually accept your offer if between 93 and 95% of asking price. Some tough customers however want 100% of asking price…and some even adjust the price upwards if not taken immediately…that ain’t fun dealing with them if you are a buyer and for some reason you really want that particular property
Maybe if you want 15% discount to asking price, a distressed vendor is what you should be targeting. Unfortunately, they don’t have a banner outside their property, or a sign on their forehead letting you know they are in that situation. Loose lipped REA’s are your best bet here…if you get a savvy REA or a tight lipped private vendor, once again you’re hooped.
Realistically, with only 4 offers at 15% discount, I think you are getting frustrated way too early. Chin up and keep going. To quote a dreadful saying “All of the low fruit has been picked.” Maybe time to either get an extension to your ladder, or put your ladder away altogether !!
As an overall comment, vendors generally speaking aren’t stupid and don’t just give their properties away…remember, they are trying as hard as they can to squeeze as much out of you as possible, with an unconditional contract their aim. All of these mickey mouse ‘walk’ clauses that seminees are taught seldom work in the real world against tough vendors….don’t you just love the concept of a free market. [biggrin]
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Thanks Dazzling,
I feel like giving up as in this northern corridor it is so hot, but the question is would you still purchase at market value if you can’t get below market value? Also we all have our opinion about the market & mine is that Perth has another 2 years, & about 10% per year growth before a correction.What is your prediction?I haven’t bought in Perth, but just a quick comment on expected cycle.
Sydney led the field with the hot property growth, which then started affecting other areas of Australia, first the Sydney spill and then other capital cities, and then other capital city spillover areas…
Then Sydney growth dropped and has had a couple of dud years… which was followed in the Sydney hinterland, then some of the other capital cities and their hinterlands…and so on.
It is generally expected that it is all the one cycle, just hitting different parts of the country in a domino affect. You may find that the Perth market is about to run out of steam as it follows the cycle set by most of the other country. If this is the case, you can expect to lose money if you purchase on the assumption that the capital growth will catch up with your overspending to get into the market. It will then take several years for the market to pick up again.
Sydney is now beginning to recover growth slowly (starting in the more desirable suburbs) which is expected to fan out… etc etc
Having bought a property at the peak of the Sydney heat, I have to say I am glad I had the sense at the time to only pay what I believed a property was worth, ignoring others who outbid me on property after property. Many of those people are now sitting on properties worth less than what they paid, as they all bought with the notion that “with this growth rate, capital value will have increased the property by $100,000 within a year, so I may as well pay extra to secure the property”.
Look hard for the property that won’t lose you money if capital growth stalls for a couple years. It’s only sheep who are led to the slaughter.
Sol,
By definition I always purchase at market value…I’m the buyer, and therefore I am the market for each individual property that I successfully negotiate to contract acceptance stage. What other people “think” it’s worth…well that’s down to speculation and hearsay.
What’s my opinion on the Perth ‘market’. I don’t have one. How could anyone reasonably lump so many properties into one huge melting pot and come up with an intelligent “average”…meaningless.
If you narrow your focus down to the Perth residential market…I still don’t have one – way too big and complex for me to capture into a single figure.
As an example, how would you describe the ‘market’ if you had the following data ;
Two Rocks +28%
Hillarys +9%
Sorrento -4%If you said the market was overall doing 11%, you’d be wildly wrong with two of them and sort of close with the third…My question to you is – how would you describe the ‘market’, and more to the point what value do you perceive their is to you after you’ve described it with respect to your individual property selection ?? I personally don’t see any value in the exercise.
I do however, have an opinion on the very specific individual properties that I own and have researched to death. I fully expect between 5% and 8% over the next 2 years for my particular ressy stuff, and between 9% and 11% for my industrial stuff. This knowledge however, is of no use to you or anyone else, as no-one owns my individual properties except me. Situations arise that may affect my property – either negatively or positively – that may not affect the place next door, let alone ‘the market’ which could be 50km away.
Properties are by definition individual and must be analysed as such. We aren’t talking NAB or CML shares here now.
IMHO this ‘market’ talk doesn’t cut it. Fantastic for analysts and journo’s, but not much help for individual property investors.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Thanks Luci & Dazzling.
Luci, I agree that the Perth market is just behind the Sydney market but with the economy VERY strong here in WA, with the shortage of workers, the high immigration rate from eastern staters & UK, the mining boom & the “cheap property prices” (looks that way to a sydney sider) I just wonder if we have a long way to go?
I guess I jump in & find out or continue to be a spectator?
Dazzling, is that 5-8% per year or over the 2 years & if so would you still buy residential now or wait for the motivated sellers in a few years time?
Also what do you think about Craigie, Carramar/Tapping, (old)Joondalup & Kinross?Hi Solomon
The residential market did slow down with the last interest rate, however it was short lived.
There is ample evidence to show that the market is currently booming. My properties are averaging 10-16%. Will it continue… who knows? Experts are stating that it will due to the resource boom we are experiencing.
I would continue to persist in locating a property, however broaden your horizons.
You state the northern corridor is hot – it is hot everywhere, you may find more value in the southern corridor.
Also do a search on PERTH – many comments on various areas that may interest you.
Regards, M
Solamon,
I would go south young man,Bunbury Australind area
do an owner.com.au search.
Should fined somthing to keep you happy.
RegardsHI westinvest,
I agree there are many great opportunities in south west.Last land release in Dalyellup sold out within 3 hours.
Bunbury – CG 37% in last 12 months. Rental returns excellent compared to Perth.
It would be great to hear what other Perthites are doing and where they are investing.
Bunbury currently experiencing biggest property boom in last 30 years. Projects of $4Billion currently on the table.
.
Gerealdton in the North is also still riding a wave of popularity and seeing Great CG, how about Karratha or even Darwin..
As for offering even 10% below listing price..how long had these properties been on the Market?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorGERALDTON IS THE BEST PLACE TO INVEST!!!! EVERYONE SHOULD BUY SOMETHING THERE!!!!
Please note, I do have property in Geraldton and will always talk up this area so my investment increases in value!!!
))The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksOriginally posted by solomon:My wife & I have looked at well over 100 properties in the past 3 months, have put out over 10 offers & 4 written offers and they have been realistic offers not even 15% below market value. Anyway, the thing is not one has bitten, the market is getting even hotter. I’m seeing properties sell before the first home open just like it was 18 months ago.
Properties that need over 30K spent on them are going for the price that they would if already renovated.
Do we sit tight and pray for the market turn-around or jump in for the last 12-24 months ride?
Perth investors with experience, what would you do?**********************************************
Dear Solomon,Do your due diligence and get investing soon. There is still more growth for the Perth property market to come over the next 3-5 years, very much unlike the property markets in the Eastern States.
regards,
Kenneth KOH.Did you guys hear today that BHP are setting up their world headquarters in Perth following their purchase of WMC??? That means they are bringing the HQ from the UK and closing the VIC support office and setting it all up in your backyard.
This will be huge for Perth!!!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential Linksoh here we are:
not quite a shift of the whole operation, but the nickel division is still good!
http://www.megainvestments.com.auJohn Carroll
My first post, but this topic digs at my passions. My partner and I have had investment properties in Australind, Mandurah and Collie over the last 2 years. We have experienced incredible capital growth in all areas.
A few months ago we sold our Collie property and reaped a whopping 38% profit after on 1 year. Our Australind and Mandurah properties are performing at the same rate or better.
We are continuing to purchase land in these areas whilst the market continues to grow. In our 2 years of investing we have moved from a modest portfolio of less than $200k to having a portfolio worth in excess of $1m.
With the economy being in such a strong position and only continuing to improve here, now is not quite the time to stop buying in WA. [biggrin]
Ausprop, the news report I heard said they were moving all their offices there giving the nikkel operations as a good reason for doing so. Should have known those reporters got it wrong again!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksThanks all for your advice.
One thing I did’nt mention that may change your advise, we work in Joondalup & we can get the $7k from the Fed gov & no stamp duty up to a $250K purchase from the state gov.
Where to buy now as this area is HOT HOT HOT, as in selling within a few days?Originally posted by DreamBig:My first post, but this topic digs at my passions. My partner and I have had investment properties in Australind, Mandurah and Collie over the last 2 years. We have experienced incredible capital growth in all areas.
A few months ago we sold our Collie property and reaped a whopping 38% profit after on 1 year. Our Australind and Mandurah properties are performing at the same rate or better.
We are continuing to purchase land in these areas whilst the market continues to grow. In our 2 years of investing we have moved from a modest portfolio of less than $200k to having a portfolio worth in excess of $1m.
With the economy being in such a strong position and only continuing to improve here, now is not quite the time to stop buying in WA. [biggrin]
Come South Come South all Ye Investors
Rockingham touted as the fastest growing area now??
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
))
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