WA property prices in freefall....
Jan 18th 2009 | 10:40 pm
#16
Thread Starter
BE Forum Addict
Joined: Oct 2005
Posts: 3,453
From: Perth
Re: WA property prices in freefall....
I don't think you're comparing like with like. In your first question about this you were talking about a $1 Million house and a $500k house. In the unlikely event that the $1 Million property falls by 50%(!!) to $500k, of course the $500 house won't remain in the same value range. It will drop, but probably not by 50%, but perhaps about 35% to about $325k.
It's as simple as the fact that properties in the top end of the market have more to lose and less (people and $) to prop it up. The top end falls the most, the middle loses a bit less, and the bottom end of the market loses the least.
It's the same the world over, and not just a phenomena of the housing market. Have a look at the car market - there's bigger margins being slashed off the top-end models than the bottom of the range models.
It's as simple as the fact that properties in the top end of the market have more to lose and less (people and $) to prop it up. The top end falls the most, the middle loses a bit less, and the bottom end of the market loses the least.
It's the same the world over, and not just a phenomena of the housing market. Have a look at the car market - there's bigger margins being slashed off the top-end models than the bottom of the range models.
Jan 18th 2009 | 11:02 pm
#17
Just Joined
Joined: Aug 2008
Posts: 19
Re: WA property prices in freefall....
I think they will keep falling for at least another year yet. The banks arent lending the unemployment rate is growing so the prices can only go 1 way and thats down. When I bought my 1st house I was told by the bank that I would only get 3x my salary up till early last year banks were lending more than 6x peoples salaries which therefore put prices higher. All in all the greed of the banks are to blame for the inflated house prices and the current financial climate.
Jan 19th 2009 | 12:27 am
#18
Forum Regular
Joined: Jan 2009
Posts: 37
From: Sydney
Re: WA property prices in freefall....
It was only a matter of time in WA (also read Queensland). When some commentators are commenting in the media about a potential 40% drop in house prices, I think they should only be referring to towns and cities that have been riding on the mining boom.
Jan 19th 2009 | 4:58 am
#19
Joined: Jun 2006
Posts: 4,555
Re: WA property prices in freefall....
Plot house prices and commodity prices together and you will see where Perth is headed. Banks no longer want to lend to investors and a substantial deposit will be required for anywhere not meeting valuation requirements.
Jan 19th 2009 | 7:24 pm
#21
Forum Regular
Joined: Jan 2009
Posts: 37
From: Sydney
Re: WA property prices in freefall....
We had the same experience in Sydney in 2005, the boom started later in WA. You didn't have to be a genius to know it was destined to happen there (with a time delay) as well.
