Giantaxe

I don't know anything about the housing market in Perth, but if I was going to buy there at the moment - or anywhere else that's seen unusually large increases in prices in the last few years - I'd want to know whether prices had become unattached from economic fundamentals like rents and incomes.

wavy_davy

Ok having moved out here 7wks ago I feel relatively qualified to help you

When we arrived and started looking at the real estate prices, we found that we couldn''t get a 4x2 in a relatively decent area for under $380,000. Considering $250,000 was the target price for us 1yr ago we were feeling slightly screwed! We have been lucky enough to pick up a block for $220,000 and a 4x2 house for $143,000, we're borrowing $220,000 on a single income and the mortgage is still 45% lower than it was in the UK, my wife also won't have to work which was one of our objectives. Because we had approx 40% to put down the bank gave us unconditional approval on a fixed rate (fixed on construction also) offset mortgage, the only docs I needed were from my employer to state my conditions of employment, and ID, bank statements etc.
As far as the market goes, im my opinion the market will not stop until it is inline with the eastern states for a few reasons

1. There are still 500 families coming from abroad and the eastern states per month, external currency is driving this boom mainly which is difficult to conrol internally whilst the £-$ is still so good.

2. This boom is driven by resources and the deal Howard has just signed witht the chinese will see Uranium popping out of the ground here for the foreseeable future (10 yrs and beyond). This boom is driving the whole Australian economy not just WA.

3. The job market here is phenomenal, the employment pages make up half the thickness of the West on a Saturday, 25% of these jobs are for mining etc. I've been lucky enough to attract a wage just £500 short of what I was earning in the UK, as the MODL lis confirmed, my trade is in demand.

4. After talking to a friend in Qld last year who said "they've run out of places to build on the east coast" which I believe is true, WA is now being marketed top to bottom with new developments and is growing at a staggering rate. With all these factors I personally believe (and it's only opinion) that the WA house prices will only slow when they come into line with the east coast and UK markets, hence slowing the immigrant explosion, And most experts are saying the market will slow not crash but this is still 5yrs off.

So sadly all in all, if you can get your money in now, get it in as fast as possible. Things are only going to go up, the prices are stilll nowhere near on a par with the UK but unfortunately many young Aussies are being priced out as well. The 3x1 market is still hovering around the $350 mark but even they are still rising, remember the averge 4x2 price of $380,000 is still only approx £150,000 which is £70,000 under the UK average.

Hope this helps and does p*ss too many of you off, but it's the way I "perceive" things to be

Dave

wavy_davy

If any of you are coming to Perth and want the email of my mortgage broker thenPM me, he should be able to tell you what you can borrow etc before you arrive....

Sunny_Glesga

see where your comming from when you look at the Average house price in the UK being £220K for a 4 x2 BUT, this is the average so would we be saying that ( As i live in a 4 x2 now, with an estimate Value of £125k) which is way below the average in the UK as you mention.

Now! you have mentioned a figure of $380k as an average in Perth/Aus for a 4 x2 if we compare this then it would be nice if there is a lower end of the 4 x2 Houses like it is in the UK which would be around $220k


I think if we have to look at the big picture here the average of a 4 x2 in the UK of £220k may be an average with a massive sway either way i.e. my 4 x2 £125k then the average 4 x2 £220k then where the average workin guy cant live £315k

Getting abit confusing!

Just need to know where the below average is for a 4 x2 for around $220k

wavy_davy

A below average 4x2 in Perth right now will cost you $320,000 upwards

NKSK version 2

And neither are salaries...

renth

They are if you're in mining. Thing is, not everyone in Perth is in the mining industry

northernbird

not only are the house prices increasing here in Perth but due to the influx of people to the city there is also a huge shortage. I can only comment on the northern suburbs because that is where I have been looking for the last few months. My search area was huge from duncraig up to kinross across to Carramar and Tapping. I have been to every damn home open in my price range. I started out being dead picky about stuff but for those coming you can't be picky. If the house has a good floor plan and satisfies 80% of your needs you have to go for it because they are on the market for a couple of days and then gone. One agent told me she had 25 offers on one property in Woodvale. Also a lot of people are getting greedy about what their house is worth so there is a lot of crap around too for top money. My husband is in oil and gas and the resouce boom is going to be here for 10 years + so for those coming don't hang around when you get here buy quickly because they will go up for some time yet.

Amazulu

This boom in Perth is being called a 1 in 100 year boom. This is the big kahuna. This is Alaska in the 70's, Aberdeen in the 80's or Las Vegas in the 90's. A lot of things have come together at the same time to create this, huge demand from China & India, low interest rates, low inflation & a massive skills shortage. Perth is at the centre of all this & that's why it's booming. The mining & oil & gas industries are attracting the people they need here & paying them accordingly. So there are a lot of people coming here who can earn AUD100k+. The boom means that if you are in it, you are a player & it's good. If you are not, if you are on the outside looking in, then it's sh*t. Perth has always been a boom & bust city. They had booms in the 60's & the 80's & they were followed by major busts & it all ended in tears. Will it happen again? Who knows, I wouldn't like to call it. I personally think it has another 3-5 years left in it, maybe more, but what do I know. China & India are going to keep growing, they need iron ore & gas & oil & zinc & lead etc. All that stuff is here. WA will eventually mine uranium & when it does it will create another surge. Maybe the economic balance in Australia is shifting from the east to the west. People who know a lot more about it say it is happening. Others say it is not. It's happened in other countries in the past. WA's contribution to the Australian economy is way out of proportion to it's size. At the moment WA is propping up the rest of the economy, hence the recent interest rate hike. Will there be a correction, I don't think so, not for a while, but who knows.

Sorry for going on a bit, but I was just trying to explain why entry level houses are now AUD400k & rising. Get in quick before it's too late or hold off 5 years & wait for the bust, if it comes.

I found this article from the LA Times interesting. It's not only about Perth but explains a lot:
http://www.latimes.com/news/opinion/...day-commentary

wavy_davy

Mine is, then I guess I'm lucky........and I'm not in mining

movetoperth

I really don;t think you canmake those sorts of comparison between the uk and perth, comparing a country with a city in my mind just won't work.

Lynn

BadgeIsBack

I'd go along with some of that. You're screwed as a first time buyer in the UK with new economic rules that state now the average person needs 2 incomes. The thing is, this has partly happened because 2 people have gone out to work to inflate the market. If people refused, then prices would have to drop due to the law of supply and demand, but people are jumping on the only bandwagon they see and think they need to be a part of. There's a lot of migrants in this site who have never known buying in a boom and am cashing in on it now. I'm in a similar situation but bought in 2000 at the start but after the first big move which meant that family homes were out of reach. It's now the same in Australia, and Perth is/[has] catching up.

The difference is, is that a good wage earner can sell well in the UK and buy a lifestyle he or she wants in Australia but time is running out as these terms are getting harder.

Incidentally, it's why I came to Melbourne : its as if I bought in 1998 when it was stil possible for a 1 income family to buy a family home. I'm the only person in my peer group where my wife doesn't have to work. This has given us a 10 year head start and I thank my lucky stars for it.

I had to work hard for the first deposit on my house but the rest was luck and it makes me feel guilty about the first time buyers in any country.

steve99

I agree with everything you've said here Dave, Good post.
At some point we will see a levelling off in the housing market and normal stable growth from then on, but I cant see a crash happening.
People claim that Sydney has gone through a crash, we had a seminar thing at work a few weeks back from a number of financial advisers, analysts etc
the data they gave re Sydney was that the actual impact of the so called crash was that prices had only dropped 5.9% - I cant see how that can be called a crash... thats like $500K dropping to $470K....

So as Dave said, if your 100% your coming come as quick as you can, dont hold out for a crash that is highly unlikely to happen.
Another thing ive noticed on some of the threads lately is that people expected to be able to come here and only one person need to work to support a family, I dont have kids, but I think is probably one of the most unrealistic things for people to expect. Im not trying to start a war against mums, but I dont think with the way the world/society has developed its realistic to expect not to financially contribute to a family, especially when your trying to do it in one of the most desirable places in the world to live.
Please dont take that out of context im purerly saying it for people who are looking at coming over to Perth and this is one of the main things they think they can achieve, I personally dont think its realistic.
Steve

Amazulu

We are in the same situation. Our morgage is 45% of the value of our home & our mortgage is 1.8 times my single income & is getting less as my income is rising. We wife does not need to work & is concentrating on raising our son. She will probably go back to work when monkey boy starts school but it's more for her sanity rather than economic necessity. Other than the mortgage we have no debts, thus we can spend some of our money on things we want like a 4x4 ute & nice holidays.

Maybe we are lucky, things have worked out well for us but we also worked bloody hard to get where we are today.

iPom

Good post Vash. I'd like to add that someone who said Sydney was expensive - well it is and it isn't... It all depends on how far away from the city you want to live. I'm in the Blue mountains, and property here has become static and seen some fall over the past months. There's lots on the market sitting there doing nothing. A good time to buy then as people will take offers well below asking price.

I've been looking at property to buy here, and we could get a good brick house for $230 with 4 bedrooms. Maybe it might need a new kitchen or bathroom, but at that sort of price, so what?