Is it a good time to buy a house in Perth?

[Gilllian]

Have ping-ponged back from UK (only lasted 2 years!) to QLD for some much needed sunshine, but now heading over to Perth for permanent move this time :biggrin:

 

Am a bit out of the loop with real estate in Oz and I can't figure out if its a good time to buy a house or not in Perth. There's so many conflicting reports. At the moment I sort of feel it might not be a good time because it seems the mining boom is slowing?

 

Any thoughts, or different opinions, or knowledge is always helpful in making decisions!

 

Thanks

[flag of convenience]

With the market clearly highly overinflated it is obviously not a rational answer required with this question. Who knows to what limits folk will go with this crazy Aussie obsession. There appears still money to be made if flipping is your angle, providing your buying in the right location.

I wouldn't leverage myself too much hoping on capital gains raising too much. All very casino like, you pay your money and take your chance.

I'd pay more and go more towards Sydney though for gains.

[HappyHeart]

The house next door to us is up for 60k for that what we paid 3 years ago...I had a quick look on reiwa and it seems prices have shifted upwards considerably since I last looked. Maybe its a good time, cant see them falling after theyve been stagnating for past few years.

[pradiprn]

The prices continue to go up and will do so for sometime until there is supply opening up. right now affordable new homes can be had 30 to 40 kms away from Perth. As an alternative you may want to consider smaller lots or apartments near the city. Not too many choices unless you got money to blow.

[gpo1971]

House prices aren't going to come down so pays your money/take your chance. Up to you.

[Bibbs]

If you can afford it and are going to live in it. Always "yes".

 

If it's for an investment, I'd be looking east.

 

Keep reading reports of +1% growth a month.

[flag of convenience]

It is not possible to say house prices won't come down. Although the government plays a big hand in maintaining prices, it is wrong to assume no further downward spirals. We saw declines until recently and WA only needs a decline in immigration and more leaving to impact.

 

If you wish to buy with the longer term in mind it would be more worth it than seeking appreciation over a shorter term. Every chance interest rates will head upwards next year and worth factoring in to the cost.

[nicolac34]

Anyone's guess really. But since we were looking at the beginning of the year they talk of a 10% increase in prices in Perth. We bought in Feb and I asked the estate agent who sold it to us last month how much it would be worth now - he put another $50k on what we paid for it, not bad for 7 months of paying a mortgage. Of course the proof would be in the pudding, as we aren't actually selling it right now.

[flag of convenience]

Anyone's guess really. But since we were looking at the beginning of the year they talk of a 10% increase in prices in Perth. We bought in Feb and I asked the estate agent who sold it to us last month how much it would be worth now - he put another $50k on what we paid for it, not bad for 7 months of paying a mortgage. Of course the proof would be in the pudding, as we aren't actually selling it right now.

 

I'd double check if I asked a real estate agent here the time of day. It could just as well be $100,000 less in a year. It is crazy at the moment but too much so. As I say is Australia's main economic activity to become flipping one/two million housed to one another?

[nicolac34]

I agree it is crazy, but I'm inclined to believe him. I still keep an eye on REIWA and houses go up one day and under offer the next round us, and all at more than we paid for the same sort of thing.

 

With that in mind we are thinking of doing some cosmetic updating and putting it back on the market in 6 months time and see what happens.

[gpo1971]

Our neighbour’s just sold theirs for 50k more than we bought ours for in 2010 and the house is nowhere near as good. So, we’ve made that at least since then I reckon. The lower end of the market didn't take much of a hit and is now rising fastest.

 

All academic though, as it costs about 2 billion dollars to move house in this Country.

[Bibbs]

Every chance interest rates will head upwards next year and worth factoring in to the cost.

 

http://www.news.com.au/business/interest-rates-tipped-to-fall-to-new-record-low-of-2pc/story-e6frfm1i-1226727116038

 

QUOTE - INTEREST rates are tipped to fall to a fresh record low of two per cent within six months as the central bank warns financial institutions must maintain prudent lending criteria in the low-interest rate environment.

 

I also read they recon a rate cut in Feb, and another in May.

 

Time to start paying off as much as you can while the rate is low.

[flag of convenience]

http://www.news.com.au/business/interest-rates-tipped-to-fall-to-new-record-low-of-2pc/story-e6frfm1i-1226727116038

 

QUOTE - INTEREST rates are tipped to fall to a fresh record low of two per cent within six months as the central bank warns financial institutions must maintain prudent lending criteria in the low-interest rate environment.

 

I also read they recon a rate cut in Feb, and another in May.

 

Time to start paying off as much as you can while the rate is low.

 

I agree great time to pay of for those with a mortgage. Interest may fall one more time but imo there is deep concern with regards to the housing market. The dangers of out of control house purchasing must be a very real concern.

I think they will hedge their bets. They certainly won't give a lot of warning into a rate rise, but it will come. The desire for a lower dollar being the issue there. Reserve Bank is in a tough position. Either way a huge price to pay and pain at some stage to folk.

Just don't take out a loan that can't be afforded when those rates do go up....

[gpo1971]

Sound advice wherever you live. They'll be rising everywhere before too long.

[VERYSTORMY]

House prices aren't going to come down so pays your money/take your chance. Up to you.

 

Really? According to the most recent data, my suburb has come down 28% in the last year - i have just had an offer on a block accepted for $255k. The owners paid $375

[gpo1971]

Unlucky.

[Bibbs]

Really? According to the most recent data, my suburb has come down 28% in the last year - i have just had an offer on a block accepted for $255k. The owners paid $375

 

Where the hell are you?

 

http://reiwa.com.au/Research/Pages/Price-growth-by-suburb.aspx

 

The worst was Upper Swan, then Hilbert, at 28 and 26% respectively (nowhere else was over 20%).

 

Then when you look where those *are*, you'll see why. One is remote (so not many houses) and the other is on the outskirts of Armadale.

 

Also compare Upper Swan to 2011 year's data and you'll see that 2012 was an abnormally large spike, and 2013 had gone back to what it was.

This years data is down to 5 (five whole houses!) houses selling. It's hard to have reliable stats with such a small data set.

 

One big house sale last year has skewed your numbers massively. You are not *really* down 28%. Look at the 5/10 year rises.

 

But of course that would cause an issue for your argument

[Paul1Perth]

With the market clearly highly overinflated it is obviously not a rational answer required with this question. Who knows to what limits folk will go with this crazy Aussie obsession. There appears still money to be made if flipping is your angle, providing your buying in the right location.

I wouldn't leverage myself too much hoping on capital gains raising too much. All very casino like, you pay your money and take your chance.

I'd pay more and go more towards Sydney though for gains.

 

You seem to be looking at buying a house as some sort of investment, not just because you need somewhere to live and like a particular, suburb, street, house.

 

As for the market being clearly overinflated, who knows? I thought the UK market was in the same boat in 92 when we came here. We had paid 22,000 pounds for and end terrace and sold it 3 years later for 50,000. We sold it privately and the first day 2 young couples came and said they would have it, neither of them could get mortgages and they were both working with no kids. We sold it to a single girl who's Dad was a bank manager!! I thought it can't carry on like this, must be getting close to a big fall. Went back 10 years later and the same house was on the market for 100,000. Go figure.

 

If you want somewhere to live, find a suburb and a house you like and think you would be happy to settle there, go for it. You have to live somewhere and if you're not paying a mortgage you are going to have to pay rent, so it may as well be going on a mortgage.

 

Don't think it's a crazy Aussie Obsession either. Plenty of people around the world would love to own there own home.

[Paul1Perth]

I agree it is crazy, but I'm inclined to believe him. I still keep an eye on REIWA and houses go up one day and under offer the next round us, and all at more than we paid for the same sort of thing.

 

With that in mind we are thinking of doing some cosmetic updating and putting it back on the market in 6 months time and see what happens.

 

Are you planning to stay or leave Nic? There are costs in selling and buying another. If you are anything like happy with what you have why put yourself through another move. If you don't like the suburb or want something different or bigger then fair enough. That 50,000 you think you have made only gets realised when you cash it in and don't buy another property.

[Paul1Perth]

Where the hell are you?

 

http://reiwa.com.au/Research/Pages/Price-growth-by-suburb.aspx

 

The worst was Upper Swan, then Hilbert, at 28 and 26% respectively (nowhere else was over 20%).

 

Then when you look where those *are*, you'll see why. One is remote (so not many houses) and the other is on the outskirts of Armadale.

 

Also compare Upper Swan to 2011 year's data and you'll see that 2012 was an abnormally large spike, and 2013 had gone back to what it was.

This years data is down to 5 (five whole houses!) houses selling. It's hard to have reliable stats with such a small data set.

 

One big house sale last year has skewed your numbers massively. You are not *really* down 28%. Look at the 5/10 year rises.

 

But of course that would cause an issue for your argument

 

Verystormy is somewhere around Mandurah.

[nicolac34]

Are you planning to stay or leave Nic? There are costs in selling and buying another. If you are anything like happy with what you have why put yourself through another move. If you don't like the suburb or want something different or bigger then fair enough. That 50,000 you think you have made only gets realised when you cash it in and don't buy another property.

 

Stay we think. We've come to the conclusion that we aren't really suburbia people and need to be around the inner city 'buzz' if you like (if there is such a thing in Perth :biggrin:) Should have realised really, we've never lived in the suburbs whilst renting, so no idea why we thought it would be a good idea if we bought there (ok, got swayed by the big 4 bedder on a big block because we are 30 now so of course we should be doing grown up things like that...) when really we like being able to walk to cafes/bars/restaurants/supermarket etc etc - public transport in and out of Yangebup is pretty dire.

 

Anyway, we don't regret it because of the way the market has moved, but we are thinking that if we have made a bit of cash and coupled with our savings and now the OH is working we can afford a larger mortgage and buy somewhere closer to the action.

 

Not saying it's going definitely happen, and if finances don't work we'll stay put, but it's an idea at the moment.

[Guest Guest66881]

Is any time a 'good time'?

If you feel ready and have work that you feel can support the venture then why not, some like renting only (we don't).

At the end of the day if you want to buy then buy, prices are pretty steady in most areas some go up more now and then others dip slightly, but generally most areas are very stable in price, just that agents try it on to get top dollar on sales.:mad:

[Bibbs]

Verystormy is somewhere around Mandurah.

So nowhere that has dropped 28% then.

[Guest]

Perth Economy is falling, not as rapid as people first thought as large resource projects are being dragged out and that has a softening effect on a bust.

The economy is however getting worse with many now out of work and no scope of anything new in WA. Many are leaving which is good as its keeping the numbers out of work down and making rentable properties available and cheaper.

 

However interest rates have been lowered in an attempt to lower the dollar as its over inflated and as a result damaging the economy, the low interest rates have caused people who have sat on their cash for a while to buy a new house (new $10K give-away for a 1st time buyer) this is making the cheaper end of the market rise. Mostly houses up to $500K mark and new builds are rising but established suburbs are staying the same pretty much.

 

If it was my money I wouldn't bother, especially if you haven't lived in Perth before as many move on - it is limited here.

As a long term thing though its always a good idea to buy rather than pay rent but costs associated with buying and selling here are high so flipping after a few years isnt a good idea.

 

the next boom towns will be Darwin and QLD, so I would buy there as that is where the work is going forwards...........

[Paul1Perth]

Perth Economy is falling, not as rapid as people first thought as large resource projects are being dragged out and that has a softening effect on a bust.

The economy is however getting worse with many now out of work and no scope of anything new in WA. Many are leaving which is good as its keeping the numbers out of work down and making rentable properties available and cheaper.

 

However interest rates have been lowered in an attempt to lower the dollar as its over inflated and as a result damaging the economy, the low interest rates have caused people who have sat on their cash for a while to buy a new house (new $10K give-away for a 1st time buyer) this is making the cheaper end of the market rise. Mostly houses up to $500K mark and new builds are rising but established suburbs are staying the same pretty much.

 

If it was my money I wouldn't bother, especially if you haven't lived in Perth before as many move on - it is limited here.

As a long term thing though its always a good idea to buy rather than pay rent but costs associated with buying and selling here are high so flipping after a few years isnt a good idea.

 

the next boom towns will be Darwin and QLD, so I would buy there as that is where the work is going forwards...........

 

Unemployment figures were on the radio this morning and they were down again in WA. From PerthNow today is the quote.

 

Western Australia saw some growth, with its unemployment rate falling to 4.3 per cent from 4.6 per cent.

 

If you want to come and live in Perth and like the it there is no point considering Darwin or Queensland, they are totally different to Perth and each other.

 

I'm in an established suburb near the beach and prices are rising. Houses are snapped up pretty quick. Comparing like for like though with Sydney for example Perth is still very cheap. If we wanted an equivalent house in, say, Manly we would be looking at 1.5 Mil? Maybe more.

 

Here a 4x2 with garage, pool, plenty of parking would be going for about $750,000.