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$400,000 for an average house

Perth's median house price will soon hit $400,000 and the city will become the second most expensive capital in Australia to buy a house if current growth continues, an economic forecaster said yesterday.

Releasing its quarterly house prices report yesterday, Australian Property Monitors said Perth was continuing to defy Eastern States trends of declining property values.

The report showed Perth, Adelaide and Darwin were the only capital cities to record median house price increases during the March quarter. The five other capitals had falls of half to one per cent.

Perth again had the biggest increase in house prices, rising 5.4 per cent to $396,000, taking it to third place on the nation's capital city price list.

APM monitors property activity from sources including government and government-related agencies, real estate advertising, real estate agents and its own researchers.

APM general manager Louis Christopher said if the current growth rate continued in WA, Perth would surpass Canberra in the June quarter to become the second most expensive city in which to buy a house.

Perth recorded a massive 34 per cent rise in unit prices in a year to reach $259,000 on March 31, while Sydney fell 1.4 per cent and Melbourne 2.1 per cent.

Mr Christopher said he expected this week's interest rate rise of 0.25 per cent would stall Sydney's forecast recovery but would have minimal impact in Perth.

"The global commodities boom story is still intact and while this is the case Perth residential property prices will continue to rise robustly," he said.

But Real Estate Institute of WA research director Stewart Darby said the figures seemed exceedingly high given REIWA's revised December quarter median house price was $335,000. REIWA's March quarter statistics are due this month.

"The preliminary information REIWA works with from DOLI and its own internet listing service suggests the increase for the March quarter is nowhere near this order," he said. "There are indications that the price is in fact starting to plateau."

He warned the public not to jump at APM's statistics, which were probably collated using different compositions. But he agreed the March quarter statistics might show Perth moving up the list of most expensive capital cities
 

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Rate rise 'enough to ease prices'

HOME owners are likely to be spared another interest rate rise in the near future, with the Reserve Bank predicting this week's increase will be enough to keep inflation in check.
Just four days before the budget, the bank has presented an upbeat view of the economy, with growth forecast to rise from 2.7 per cent last year to as much as 3.5 per cent over this year and next.

It also says the commodities boom will continue for at least another year, giving Australia its best terms of trade since the wool boom of the early 1950s.

The bank's outlook on inflation lends support to Peter Costello's view that the interest rate rise to 5.75 per cent was a "line-ball" decision. And economists agreed that it was unlikely there would be further increases this year.

Wednesday's rate rise fuelled talk of Australia running a two-speed economy, with the Reserve Bank hurting mortgagees in the eastern states as it uses interest rates to control inflation pressures in economy partly caused by the West Australian resources boom.

Further evidence of the split economy emerged yesterday, with figures showing house prices falling in each eastern capital city while Perth and Darwin rocket ahead.

Fuelled by cash from the China-led resources boom, houses in Perth and Darwin are now more expensive than those in Melbourne and Brisbane.

According to Australian Property Monitors, Perth prices surged 5.4 per cent in the March quarter, notching up 24.8 per cent growth for the year, while Darwin house prices rose 3.3 per cent in the quarter. But low affordability continues to cripple property markets on the eastern seaboard, with prices in Sydney, Melbourne and Brisbane falling by 1.1 per cent during the quarter.

In the March quarter, east coast apartments were hardest hit, with prices falling 2.4 per cent in Brisbane and 2.1 per cent in Melbourne. The median house price was $396,000 in Perth and $359,000 in Darwin, compared with $347,000 in Melbourne and $326,000 in Brisbane.

The West Australian Real Estate Institute is hoping first-home buyers in the state may benefit from the decision to lift the official cash rate, saying the rise may dampen high levels of investor purchases. That, in turn, could give potential owner-occupiers a chance.

First-home buyers Cathy Papasergio and Brody Derich are among those willing to suffer an increase in their future monthly mortgage in the hope that it will cool Perth's burgeoning property market.

Ms Papasergio, who has been saving to buy a house for about three years, said she was optimistic that the rise in the standard mortgage rate to 7.7 per cent would scare off some of the "mum and dad" investors in Perth's competitive market.

"All the comments on the news are about how families will struggle to pay their mortgages with the rate increase, but what about young couples who want to start a life but can't even get into the market?" said Ms Papasergio, who is also expecting to benefit from at least part of the rate rise being passed on to her interest-bearing bank account.

In a double blow for mortgagees, banks have been quick to pass on the Reserve Bank's rate rise to their customers.

But in a boon to savers, West Australian-based BankWest announced late yesterday that it would lift the interest rate on its online deposit account TeleNet from 6 per cent to 6.4 per cent.

The Commonwealth Bank, ANZ and Westpac said yesterday they would lift their standard variable home loan rates by 25 basis points to 7.57 per cent, effective from Monday.

Australia's fifth-largest bank, St George, lifted its standard variable home loan rate by the same amount to 7.57 per cent yesterday. National Australia Bank led the way on Thursday.

Smaller banks, including Adelaide Bank and Bendigo Bank, have also followed suit. And mortgagees with non-bank lenders are unlikely to be spared.

A Wizard Home Loans spokeswoman said it would lift its rates to 7.22 per cent from 6.97 per cent. Aussie has delayed any decision pending the return from overseas of chief executive John Symond.

There was some good news for consumers yesterday, with the Reserve Bank noting positive signs on inflation. It said that excluding petrol and food, the annual increase in prices of goods traded internationally was only 0.3per cent.

There were big price falls in audio-visual and computing equipment, footwear and clothing.

Although there was a 3.1 per cent rise in the price of goods and services that are not subject to import competition -- a category that includes house prices -- the RBA noted that this was much lower than increases in recent years.

The bank predicted that fruit and vegetable prices would rise in the wake of Cyclone Larry and petrol would remain high. Combined, these would push inflation above 3 per cent over coming months, but it would eventually drop back to between 2.5per cent and 3per cent.
 

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Be great if you bought a nice little 3 bed double fronted maisonnette in Perth's inner city 3-4 years ago.
You'd be F*CKING LOADED !
You'd expected a bust to follow a boom like it has in Syd and to a lesser extent Melb but no bust has occurred in BRis and Adel since the heady days a couple of years ago and don't forget that Perth's resources boom has alot of grunt in it !
 

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Perth's Beach
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Western australia is going mad at the moment..

SW boom sets national pace

LEE-ANNE PETCHELL

WA's seachange phenomenon shows no sign of slowing with the South-West roaring ahead of the rest of the State for building approvals and population growth.

New figures from the Housing Industry Association show the value of residential building work approved in Mandurah, Vasse and Bunbury was $745 million in 2005.

Population grew by more than 5 per cent in each of the three centres - more than four times the national population growth rate - making them WA's "hot spots", according to the HIA.

The south-west metropolitan area, which includes Rockingham, Cockburn, Kwinana, Fremantle and Melville, came in fourth on the hotspots list. The most residential building work approved was in the northern metropolitan suburbs, which recorded approvals valued at more than $1 billion.

HIA WA executive director John Dastlik said the results, while largely expected, were further evidence of a building industry that was positively disconnected from the rest of Australia.

WA's total value of residential approvals in 2005 was $4.89 billion, up 17.8 per cent on 2004.

In comparison, New South Wales residential approvals were down by 18.7 per cent at $8.6 billion.


Mr Dastlik said there were 30,000 homes either under construction or waiting to be built in WA, guaranteeing plenty of work for the building industry for the next two years.

He said solid growth was expected to continue in the South-West and along the new southern railway corridor in the metropolitan area.

Master Builders Association spokesman Kim Richardson said the slowing of building activity in the Eastern States might benefit WA.

"We may see some labour drifting from east to west," Mr Richardson said.


But he said labour and materials shortages would continue to plague the building industry.

"As one area of shortages starts to be dealt with, another one opens up," Mr Richardson said.

"These problems will remain and we are hearing that some builders in the residential sector have their books full for at least the next 12 months."

Outside Perth and the South-West, the State's resource-rich Kimberley and Goldfields-Esperance regions recorded strong improvements in building approvals and population growth.
 

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Just remember, everything's cyclical. Melbourne and Sydney will have their boom time again and they'll leave the rest of the country in their wake.
 

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Melbourne and Sydney are about four years ahead of themselves with some of the most over valued property in the world. The last thing that anybody wants is for house prices to keep spiraling up. It's only the banks and property agents who benefit. The vendor doesn't benefit in the short or long run because they still have to buy and potentially borrow more for their next house anyway. Rising auction clearance prices means only one thing.

People are borrowing even more money to pay off bigger mortgages which = higher debt = more interest rate rises and ultimately people who have borrowed heavily being exposed to losing everything to the Banks.

STILL CELEBRATING??????? THINK ABOUT IT :bash:
 

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^Banks don't always benifit. Take the State Banks of SA and Victoria, they both jumped into the property boom of the late 1980's, throwing money at anyone who wanted to buy property. They saw it as riskless, if the lender defaults, they can take the property and sell it. However, the property market fell through, and they were left with bad debts on worthless property.
 

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There's gunna be a fucking huge stock market correction in the next few years the way things are heading.
 

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I don't see why it's so good that property prices are through the roof................Unless you're a vendor looking to sell!! But it's good to see WA is booming anyway.
 

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^^ yeah i agree, good to see WA booming as well, but i thought that higher average house prices scare away people from moving to the area...One of the big factors that contributes to a boom is the cheap house prices...
 
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