northernlights

Historically, when City business rents fall, do house prices follow suit, eventually?

I’ve recently read in the papers that Perth City (CBD) has a 10% vacancy rate, the highest for a long time. I’m hoping Perth property prices will follow suit as I’m renting, waiting to buy.

thanks Northernlights

Tooterelli

http://forum.globalhousepricecrash.c...hp?showforum=9


Well do you feel lucky? Well do you?

northernlights

I do feel lucky but this first home buyers grant seems to be working by supporting the market somewhat.

The more I read into the global situation, the more I'm convinced I'm doing the right thing by waiting to buy..

ABCDiamond

I do not 'think' that house prices will be linked to business rents.

It isn't something that I have ever noticed.

But... who knows at the moment.

I do however feel that Perth house prices are generally on the high side.
I base this on my knowledge of the Sydney market, where I can't even sell a 5 bed house for $380,000.

However there are always sub areas that defy the normal trends.

northernlights

Thanks ABCDiamond

Your opinions are much appreciated and respected!

thanks again, Northernlights

Catch

good comment ,Perth may have a long way to fall.Rents certainly wont fall as an disgrunteled ex member of REIWA told me that pushing up rents is one way to try and get people buying again,and maintain the "$400,000 floor" in the market.Sneaky buggers

Jackier

Not quite following your logic on this - surely if people are buying instead of renting, rents will start to fall, and house prices will hold firm.

Catch

Rents should have fallen through the floor as interest rates fall,but why should landlords pass on any savings as they rent out houses for finnancial gain ,not for service to the public.There are always plenty of people looking for rentals due to temp working contracts and inability to secure finance.When the housing market was red hot,rental prices still rose,now it is dropping people want to rent to avoid negative equity and probably buy once they know for sure the market has bottomed.REIWA has a big political pull in WA,so they will do all they can to put a floor under house prices,which might also work who knows.When people start "buying instead of renting"cant see rents falling.

Tooterelli

Northern Lights

Apologies if my response was a bit obtuse. It was tongue in cheek and I certainly, personally, believe that it would be madness to buy property anywhere in Oz just now. I posted the link to let you see what the thoughts on the economy/property prices are in Oz. They look dire and it's going to get worse.

We left London last year as we watched house prices crashing and rents crashing (and hearing all about supply and demand...yeah yeah).

Tooterelli

Rents are falling here in Brisbane CBD and surrounding areas as jobs are cancelled and staff and contractors are sent home (overseas and interstate)

isgraham

My landlord's agent tried putting up the rent I was paying on my previous unit by $100 per week. What I got from the deal was that I moved to a better unit in the same building for significantly less than I had been paying. What the landlord got was a rental void for 4 months and when finally rented out they were only on $5 more than I was paying in 2005. The moral of the story is they can ask for increases all they like but it doesn't mean they will get it. From the peaks of last year rents are falling where I live.

Catch

the cbd areas are more volatile to sudden changes,out in the suburbs in the $300-$450 rent bands are less liable to change,as this is where people from the cbd will move back to,if they dont go oversea's.The vast majority of people dont live in the cbd,apart from young professional's for close proximity to work,and downsizers in city apartment living.Rents will remain steady as landlords want the best returns as stockmarket returns are unreliable in this current climate.

northernlights

Exactly my thoughts Tooterelli. The UK housing market turned virtually overnight, one week it was all about a shortage of houses and rental accomodation in UK, next minute loads of homes unable to sell, rents dropping like lead balloons. It will be interesting to see what unfolds in the coming months...

Jacque

I can't comment on other capital cities (though everyone knows Perth is in the down phase after its recent boom) but only Sydney, which is still a two tiered market at the moment.

My recent clients have largely been home owners, not investors, and let's not forget that owning one's home here in Oz is still considered the great "Australian dream". The sub $400K market has been doing best, with lots of FHB's taking advantage of the soon to expire (June 2009) boost package, which has been $14K for established housing and up to $24K for new. However, like anything, this has a limit as there's only so many FHB's in the country right now. Along with tightening credit criteria and the fact that many of them still lack enough for a deposit, not all FHB's will be able to buy.

The best value market at the moment is the $800K+ bracket in many suburbs-as so many high income earners have lost money and assets and are being almost forced to sell for losses. Generally, the higher you go, the bigger the expected discount. I know someone who's likely to lose close to $3m on a property deal he did not 12 mths ago and is now being forced to sell to save his skin. Another one in trouble took a 30% discount off his orginal asking price and my client was the happy beneficiary of that transaction

However, the entire Sydney market is certainly not collapsing or undergoing massive discounts, such as above. They are still the exceptions and, in fact, local agents to me are experiencing record sales for Jan and Feb (mainly due to FHB activity). Don't believe the hype you read in the media esp by doom and gloomers like Steven Keen.

Lots of investors are holding back now due to the FHB grant and the govt's decision on whether or not to retain this come end of June 2009. They believe that (rightly) this has stimulated the market and may not necessarily influence prices after June as much as it has now. However, if one has more to spend than $600K then now may well be an opportune time to buy. With record low rates, steady rents and buyers thin on the ground, some buyers are achieving 2002 prices.

Given the global crisis, though, it remains to be seen what further impact job losses and sentiment is going to have on the Australian market. I don't believe we're going to see the full extent until the end of 09 when the lag period plays "catch up" with reality.

ozzieeagle

Sounds almost applicable to Melbourne and a very fair sounding appraisal. I've noticed the 1 mill plus places down here having fairly substantial discounts. Some Discounting between 800 k to 1 Mill. The Market underneath that seemed to drop 2pct and stay there, from its high in August/September 2008. I've got my eye on the 700 to 800k market and it hasnt moved enough for me to jump yet.... dammit.

Maybe I should look at transferring to Sydney, I could actually be tempted lol !

How close in could you get a 3 bed, 2 seperate living area place for 700 to 800k in Sydney and most importantly where ? Must be near lots of public transport, and have a busyish envionment for me to be interested. Status of area not important, as long as it's not over the top rough that is.