By Leith van Onselen
has released a new report, entitled LF Economics “An Illustrated Guide to the Latest Trends in the Perth Housing Market”, which reveals a sinking market, yet ironically the ‘bubble’ is getting larger because rents are falling faster than prices.
Below are some key extracts:
The Perth housing market looks to have entered the early stages of a long-term price downturn. Considerable evidence suggests Perth residential land prices were confidently bid up on the belief the mining investment boom would last well into the next decade. Strong population growth was forecast to continue in one of the few capital cities with a housing shortage.
In this report, LF Economics examines the long-term trends in the Perth housing market and state economy. Of particular interest is the continuing shift in power between young and aspiring first home buyers (FHBs) and the losses confronting more recent property investors who are losing wealth and income by the day…
WA’s housing market presents an intriguing case study of supply and demand given the volatile imbalances caused by the mining investment boom…
As the mining investment boom ended, this dynamic quickly reversed and rents have plummeted accordingly. It is remarkable that a small construction boom lifted off (probably stimulated by housing price growth in 2013) while population growth collapsed. Large dwelling surpluses will continue into the near future, and will likely increase as population growth continues to decline…
Gross yields have been compressing over the last couple of years, but not for the usual reason of prices rising faster than rents. Perth is producing the opposite: rents are falling faster than prices. This means the property market is unattractive to both speculative and value investors…
The report, which is 13 pages long and contains 22 charts, is
available for download here.
MB’s recent Perth housing report is also
available to members here.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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