Why are perth house prices the lowest in Australia ??

Because nobody can get here to buy one, just wait until the boarders come down, it may be a different story.

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towradgi said..
Why are perth house prices the lowest in Australia ??

Perth is a very different city to Sydney or Melbourne. The density is lower and there are less industries. Mining and its associated industries seem to dominate the business world here.

Along the coast in Perth you can find lots and lots of new estates with cheap blocks of land, so there is not the shortage of supply that you find in other capital cities.

I will get things thrown at me for saying this, but I think people in Perth don't even realise that their market is different to others and that prices here shouldn't rise the way they do in other markets. It is not Sydney. It is not Melbourne. Just because those markets have constrained supply doesn't mean that Perth does.

Want to buy an existing house in Perth? Well you could, or you could build a new one and it will still be cheap.

I have spoken to enough people that have bought in the peaks and they are flat out selling for what they bought back then, and this was supposed to be a boom time.

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decrepit said..
Because nobody can get here to buy one, just wait until the boarders come down, it may be a different story.

I have a friend that is a conveyancer and he was telling me that a lot of purchases are from interstate buyers. Sight unseen. A lot of conveyancing companies have been flat out.

I think they are following cheap prices, but I am not sure they will find its sustainable as a good investment.

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decrepit said..
Because nobody can get here to buy one, just wait until the boarders come down, it may be a different story.

The rest of the world might be living a utopian dream in H2O fission powered hovering mansions with robot cleaners and taking vacations to the endless tubular lefts in the diamond seas of Jupiter by the time the WA borders come down.

Pretty sure you can rule Novak out from making any Perth property purchases in the foreseeable future.

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FormulaNova said..

I have a friend that is a conveyancer and he was telling me that a lot of purchases are from interstate buyers. Sight unseen. A lot of conveyancing companies have been flat out.

I think they are following cheap prices, but I am not sure they will find its sustainable as a good investment.

I recently sold a rental unit I owned for a little over a year in regional NSW. I would never buy sight unseen. Our neighbours bought SU 2 months ago and are now realising the mistake they made. Lol - they live next to me.

I earned a bit over 5% gross yeild, maybe 4% net (haven't worked that out yet) on rent and just flipped it at a 22% gain. Prices are so insane. This can't possibly last.

Bloody real estate people and negative gearing, financial advisors and mining boom
Took me 15yrs to get back to square one after the loss made following their logic/advice
Fk them all. Crooks.

'nova is right that Perth is not Sydney but that charm has been lost now its just overpriced. I want another GFC

Not many capital cities where you can live 10k's from the city and 5k's from the coast on 700m2 for well
under a mill. I reckon Perth is pretty good, plenty of jobs and affordable property.

Perth median house price always rises last in any cycle. It was close to Sydney's eventually near the peak before the GFC correction. The reasons are due to what formula one said but when all hell breaks loose in the speculation game then even perth prices rise quickly. That's what's happened for the last 100 years or so but hey this time may be different.

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CH3MTR4IL5 said..
Not many capital cities where you can live 10k's from the city and 5k's from the coast on 700m2 for well
under a mill. I reckon Perth is pretty good, plenty of jobs and affordable property.

This topic makes me very angry . I think housing shortage/pricing in Australia is disgusting, and I don't know why homeless people aren't protesting about this issue on the scale of Covid protests !. I think the housing shortage is similar to the toilet roll shortage we all saw in March 2020. Except suppliers agreed to ration supplies so that everybody could have toilet rolls (something we would never see from real estate industry). As a house in it's "original function", Why would anyone need to own more than 4 properties ?, let alone 8, 12, 15 properties that I hear some of the guys at work brag on about . I can understand a holiday retreat, and a house for the kids (3 houses). But not more than that. The greed must stop. Posters on here might find current state acceptable/normal and people sleeping in their cars normal. I do not. As a said in a previous post, the politicians are part of the problem as well. So nothing will change until something gives them a tune up at the polls:

www.abc.net.au/news/2017-04-20/australian-politician-property-ownership-details/8453782?nw=0&r=HtmlFragment

The mindset needs to change. Housing should be viewed a safe place to shelter, not a commodity to improve capital gain.

Private property ownership land laws (not just domestic) that allows gains to be capitalised into the price is the fundamental problem, the cause of of all cyclic corrections as closely tied to banks overall asset sheets and interest rates and will stay as such, no matter what is fiddled with via different land policy/taxation laws.


i see a lot of low starter interest rate, no deposit housing schemes raising their head again. Plus all the "buy multiple properties using the capital gain " sprukers as well. Right bang on time!!

you think these price gains are something, you haven't seen anything yet. The speculation game will soon be in over drive .. Yet again.

wait for the TV house renovation / flip programs to start up again .

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jn1 said..

CH3MTR4IL5 said..
Not many capital cities where you can live 10k's from the city and 5k's from the coast on 700m2 for well
under a mill. I reckon Perth is pretty good, plenty of jobs and affordable property.

This topic makes me very angry . I think housing shortage/pricing in Australia is disgusting, and I don't know why homeless people aren't protesting about this issue on the scale of Covid protests !. I think the housing shortage is similar to the toilet roll shortage we all saw in March 2020. Except suppliers agreed to ration supplies so that everybody could have toilet rolls (something we would never see from real estate industry). As a house in it's "original function", Why would anyone need to own more than 4 properties ?, let alone 8, 12, 15 properties that I hear some of the guys at work brag on about . I can understand a holiday retreat, and a house for the kids (3 houses). But not more than that. The greed must stop. Posters on here might find current state acceptable/normal and people sleeping in their cars normal. I do not. As a said in a previous post, the politicians are part of the problem as well. So nothing will change until something gives them a tune up at the polls:

www.abc.net.au/news/2017-04-20/australian-politician-property-ownership-details/8453782?nw=0&r=HtmlFragment

The mindset needs to change. Housing should be viewed a safe place to shelter, not a commodity to improve capital gain.

I am not sure why you're looking at Perth or my
comment for this. Our homeless level is 0.35%, lower than the national average and much lower than regional areas in WA.

While i think negative gearing is a rort, it does drive new home building for the depreciation claims, and puts lots of rental properties on the market. While it might make home-ownership harder for first home owners who are competing with investors, it doesn't increase homelessness, as it provides a much larger pool of rental housing.

If your mates have 15 properties then they are providing affordable rentals to 14 families, while they get a tax benefit (and the hope that holding those properties will give them a capital gain down the track).

meanwhile, you're ok with a holiday house that benefits no-one else and houses for your kids?

A possible theory is that WA has the ability and the government initiative to release more land than other states, thus maintaining lower prices.

Out of interest, have coastal areas in Perth prices gone up similar to Sydney (where there is less available land)?

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CH3MTR4IL5 said..
I am not sure why you're looking at Perth or my
comment for this. Our homeless level is 0.35%, lower than the national average and much lower than regional areas in WA.

While i think negative gearing is a rort, it does drive new home building for the depreciation claims and puts lots of rental properties on the market. While it might make home-ownership harder for first homeowners who are competing with investors, it doesn't increase homelessness, as it provides a much larger pool of rental housing.

If your mates have 15 properties then they are providing affordable rentals to 14 families, while they get a tax benefit (and the hope that holding those properties will give them a capital gain down the track).

meanwhile, you're ok with a holiday house that benefits no one else and houses for your kids?

Sure, negative gearing makes it attractive to build new, but it also continues to tip the scales in favour of investors with high marginal tax rates. Negative gearing and the 50% capital gains reduction both need to go if we want to give young families a chance. Those with the investment properties argue it will increase rents - perhaps, but it will also decrease capital values and bring some fairness to lower-income earners.

Most holiday houses wouldn't impact the cost of real estate in capital cities, and if the system was fixed, there wouldn't be a need to buy houses for your kids.

Yes- they are two different things though. Affordability for first home owners and homelessness are not the same - if you can't afford to buy but there is affordable rental properties that is a different social issue then if you can't find somewhere to live.

a holiday house seems to me to be more of a problem than investors who are contributing to liveable houses. Its taking up housing stocks without providing anything.

my folks live in a holiday coastal town in vic and rentals are sky high with local workers commuting in from other regional areas, most of the year 75% of the houses are empty.

@ 2.5% interest rate, and 10+% deposit paid on a property, who is negatively geared in 2022?

Nobody mentions the short term rental effect. When people turn houses and flats into short stay accommodation it cuts the supply of places for renters to live in. Its a big problem in Byron Bay and in the eastern suburbs of Sydney

probably 18ths from now, there'll be a massive oversupply

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CH3MTR4IL5 said..
Yes- they are two different things though. Affordability for first home owners and homelessness are not the same - if you can't afford to buy but there is affordable rental properties that is a different social issue then if you can't find somewhere to live.

I have noticed in Perth recently a few intersections where people stand around with signs saying "I am homeless.... blah blah blah". I don't believe them for a second. Probably a good earner for some I think in my cynical nature. At least at the intersections where they offer to wash your windscreens they are doing something positive.

As for rental stock, in Perth at least, you would think that if rental income was such a great thing that there would be a huge number of investors building new houses to meet the market, but my guess is that there isn't. The rental returns are just not that great.

If there were huge capital gains to be made in Perth there would be a huge number of new builds but again, I think there aren't.

I would say that this just about proves that the housing market is driven by investors paying more for houses on the basis that they will get windfall capital gains. If the gains are not there, investors stay away, at least in the numbers that they seem to exist in Sydney and Melbourne.

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CH3MTR4IL5 said..

I am not sure why you're looking at Perth or my comment for this.

Nothing personal against you. I just sensed acceptance/rationalisation from your 1st comment.

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CH3MTR4IL5 said..

If your mates have 15 properties then they are providing affordable rentals to 14 families, while they get a tax benefit (and the hope that holding those properties will give them a capital gain down the track).

There you go again. Somebody greedily hogging all of the demand because the rules says they can, and then justifying it is not moral/right/good.

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CH3MTR4IL5 said..

meanwhile, you're ok with a holiday house that benefits no-one else and houses for your kids?

I own 1 house (owner/occupier). That is it for me. I can't take it with me when I die. However, for people that want that holiday house, I can accept that and think that is reasonable.

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bjw said..
@ 2.5% interest rate, and 10+% deposit paid on a property, who is negatively geared in 2022?

Maybe a good time to get rid of it without too much adverse impact on existing investors?

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jn1 said..

CH3MTR4IL5 said..

I am not sure why you're looking at Perth or my comment for this.

Nothing personal against you. I just sensed acceptance/rationalisation from your 1st comment.

CH3MTR4IL5 said..

If your mates have 15 properties then they are providing affordable rentals to 14 families, while they get a tax benefit (and the hope that holding those properties will give them a capital gain down the track).

There you go again. Somebody greedily hogging all of the demand because the rules says they can, and then justifying it is not moral/right/good.

CH3MTR4IL5 said..

meanwhile, you're ok with a holiday house that benefits no-one else and houses for your kids?

I own 1 house (owner/occupier). That is it for me. I can't take it with me when I die. However, for people that want that holiday house, I can accept that and think that is reasonable.

Individuals are not going to give up investment properties when the government make it lucrative with the tax breaks they get.

The Labor government tried to campaign with policies to reduce this and never got voted in. Now they have given this policy up as they feel the public will do the same to them.

Unfortunately enough people think its a good thing for them and the rest won't vote for someone that would help them. I had this discussion with some idiot a few months ago and she wouldn't vote for Labor as she felt 'they are all the same' and instead would have wasted her vote on some stupid small party. I fear that a lot of people would do the same and the problem will never get fixed. In her case she was too stupid to see what the problem was and that there was a party that were trying to fix it.

There is a LOT of GREED in the market, fueled by Reserve Bank and Government policy. It seems everyone is on the bandwagon.

I sat out of the property market for some time and finally took the opportunity to buy a house (owner occupier) when Covid hit.

I really am shocked at the price rises here in my GC area (up over 40% based on recent sales).

I feel sympatric towards the renters. The house which we rented went up 25% when we vacated!

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FormulaNova said..

Individuals are not going to give up investment properties when the government make it lucrative with the tax breaks they get.

The Labor government tried to campaign with policies to reduce this and never got voted in. Now they have given this policy up as they feel the public will do the same to them.

But does this make it the right thing to do ?

Investors with rental properties provide a valueable service to the community.

If dumb Labor governments want to make unprofitable for the investors, they better get busy building public housing.

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jn1 said..

FormulaNova said..

Individuals are not going to give up investment properties when the government make it lucrative with the tax breaks they get.

The Labor government tried to campaign with policies to reduce this and never got voted in. Now they have given this policy up as they feel the public will do the same to them.

But does this make it the right thing to do ?

Well, that's an interesting question.

From an investor's perspective, they won't care and will use whatever financial options they have to them.

From a socialist's perspective, its not the right thing to do, but they won't be housing investors anyway.

Guess which ones most people will be? They, quite rightly in my opinion, will use the tax breaks to buy as many houses as they can afford, and push up the prices for everyone. You cannot expect everyone to have a strong social conscience and not buy investment properties. You should keep in mind that people in that position are in that position so don't care about affordability for others, or even worse they buy a house for their children because they can see that they would otherwise never be able to afford one themselves... making the problem worse.

People are naturally self-interested. Hoping that they will do the right thing for the common good is a waste of good thinking time. The only way to fix it is to fix the tax treatment of investment properties.

I don't see it ever resolving itself either as investors are always going to be able to afford to outlay more money than an owner occupier.

I sure as heck know that the Liberal government won't change it.

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cisco said..
Investors with rental properties provide a valueable service to the community.

If dumb Labor governments want to make unprofitable for the investors, they better get busy building public housing.

If there were no capital gain discounts and the amount your could negative gear were limited, then the rental market would end up in an equilibrium of rent price versus house costs.

It didn't become a problem when Labor changed the rules a long time ago, but it was changed back quickly anyway. Its a shame that it wasn't kept that way for a while to see what would happen.

Perhaps our government's policy on negative should be similar to the UK's.

"While allowing for negative gearing in its basic form, the United Kingdom does not allow the transfer of one type of income (or loss) to another type of income."

And the UK still has speculative bubbles and crashes happen. A lot of states in America only allow you to negative gear your own home. Same effect. They all have housing shortages and in affordable property prices.


As I said before tax policies have changed dramatically in the past 2-300 years and the same result. Inflationary / deflationary environments. Gold standard not gold standard. Varying fiscal policies - floated dollar non floated dollar. Central banks, no central banks Etc etc. etc. - the list goes on.


tThe fundamental reason has already been outlined. Until that changes - same same.

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eppo said..
... A lot of states in America only allow you to negative gear your own home..

How do you claim tax expenses against your own home ?


The 50% capital gains tax reduction (as stated before in these very forums) is to make the capital tax calculation consistent and easy, and capped at 50%.

Without the 50% you would be entitled to offset any capital expense against any capital gain. So anyone with a rental property then has to collect all their expenses they had on capital works over the life of the ownership and offset them against any capital gain on sale of the property.

Given the length of time most people hold property for and the manner in which tax consultants work, I bet if they removed the 50% blanket capital gain the majority of sellers of rental properties would manage to find more than 50% offset to any capital gain and the tax department would spend billions chasing those tax funds. Try proving that you did / didn't pay $50k to Billy Bloggs to do some landscaping in the back yard 25 years ago, and it has cost you $25k in interest on those payments.

The 50% makes it simple and easy for everyone and means there is a relatively low cost in collecting tax.

I doubt removing it would change the total tax revenue, hence if the typical cost to owners doesn't change why would any 'incentive' associated with it change ?


I'd suggest the single biggest 'incentive' to drive prices up is relatively low deposit required for a mortgage coupled with relatively very low interest rates. A general market sentiment then causing capital values to increase at significantly greater than inflation or interest rates becomes self-inflating until something bursts.

But I think this topic is being over analysed.

The original question was :

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towradgi said..
Why are perth house prices the lowest in Australia ??

The answer is simply another question : haven't you tried living in Perth ?