Bullion Baron writes... My recent post on the Melbourne property market outlined the statistics and data behind my particularly bearish outlook on this particular city where I suspect a 30% fall from peak by the end of 2014 is likely.
Overall I have a negative price outlook on Australian property in general with national stock on market near record highs (and around 9-12 months worth at current sale volumes), lending growth running at some 35 year lows and prices still high relative to incomes (despite the claims that affordability relative to incomes is back to 2003 levels, it is still historically at a very high multiple) and rent.
There is one market though which I believe could see real growth (a rate above inflation) over the next few years.
The Perth median house price is currently $466,861 according to Residex, which is around $5000 less than the June 2006 level of $471,441. Prices rose into early 2008 where they reached a peak of $520,928, before falling and trending sideways to where we are presently. So from June 2006 we've seen no nominal growth in Perth house prices and real prices (inflation adjusted) have taken a hammering (and they are also down over 10% nominally from the March 2008 peak).
Here is a chart showing the boom in Perth prices followed by the 6 year lull:
When did you see the turn around Austacker? Have prices in the suburb tracked relatively similarly to the median (e.g. 10% lower than 2008 peak levels, sideways since 2006)?
Yes absolutely it has been flat. The last 2 months we have seen houses move a lot quicker. I would say the average is 30-45 days where as before it could push out well past 60-90 days +
We had a price barrier in the suburb of $600K which is what the returns should have been back in 2008/09 but it never went anywhere. That barrier seems to be accepted for the better places now. While you never trust the averages I would say 10% is a fair estimate.
We noticed a few months everyone was saying how tough they were doing it and had no money. The interest rates cut, Carbon Tax benefit for lower income families, has all created a bit of extra cash. If people think they are managing they will step up a notch. Which is fine at the moment, but if it hits 10% interest watch out.
I am taking this as my run to sell up and down size.
BTW the suburb is in and around the Swan Valley.