It's the economy, stupid!

 
  don_dunstan Minister for Railways

Location: Adelaide proud
Microsoft decides to invest money into affordable housing in Seattle - because the various state and federal authorities wont. From the NY Times:

With its $500 million pledge to address affordable housing in the Seattle area, Microsoft isn’t primarily cutting checks to local charities. Private companies have done that before. Nor is it proposing to create housing for its own employees, as corporations have done in the past, too.

Rather, Microsoft is trying to help fix a market failure — a job government typically does.

“It really represents something almost unprecedented,” said Matthew Gordon Lasner, an associate professor of urban studies and planning at Hunter College. “What we’re seeing Microsoft do is in effect privately assume the role that historically the federal government and the states have played.”

Meanwhile an interesting interview with French author Christophe Guilluy about why the "yellow vest" movement is unstoppable - Spiked:

One illustration of this cultural divide is that most modern, progressive social movements and protests are quickly endorsed by celebrities, actors, the media and the intellectuals. But none of them approve of the gilets jaunes. Their emergence has caused a kind of psychological shock to the cultural establishment. It is exactly the same shock that the British elites experienced with the Brexit vote and that they are still experiencing now, three years later.

The Brexit vote had a lot to do with culture, too, I think. It was more than just the question of leaving the EU. Many voters wanted to remind the political class that they exist. That’s what French people are using the gilets jaunes for – to say we exist. We are seeing the same phenomenon in populist revolts across the world.

All the growth and dynamism is in the major cities, but people cannot just move there. The cities are inaccessible, particularly thanks to mounting housing costs. The big cities today are like medieval citadels. It is like we are going back to the city-states of the Middle Ages. Funnily enough, Paris is going to start charging people for entry, just like the excise duties you used to have to pay to enter a town in the Middle Ages.

The prosperity isn't being shared, that's the core of the problem.

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  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
The future seems in many cities to cram people to higher and higher cost smaller and smaller boxes in the inner cities with limited job options outside the major cities. In some rare cases some bosses and raising the middle finger to this BS and what its doing to their people and their costs and relocating into regional centres for the benefit of all.

I remember a few years back a metal works(?) factory on the Gold Coast relocated to somewhere on the western ranges west of Brisbane, gave the option to all staff to join them. All but 1 or 2 didn't go, probably due to partners working, family etc.

My stint in Dubai is much longer than planned, but the boundary between city and open desert is literally crossing the road not far from where we live we get the kids out and about as much as we can. But would have preferred a regional upbringing as we originally planned.
  don_dunstan Minister for Railways

Location: Adelaide proud
Even Josh Frydenburg admits the Aussie economy is rubbish; and don't believe his assurances about the Coalition fixing it, they're just going to deliver more of the same - ABC

Mr Frydenberg warned of "storm clouds hanging over the global economy" and said his party's economic plan could bring about "growth, aspiration and budget repair".

"Persistent trade tensions, high global debt levels and a contraction in growth in several key economies has changed the global outlook," he said in a speech to The Sydney Institute.

Mr Frydenberg's pitch — essentially that his party would be a steady hand guiding the local economy — comes after Australia's largest trading partner, China, released its latest GDP figures earlier this week.

We've also had a string of business leaders come out and denounce Australia's reliance on service industries (including the former head of the Business Council of Australia) - 35 years of the Thatcherite sell-out is about to come back and bite us firmly on the ar*e.
  don_dunstan Minister for Railways

Location: Adelaide proud
The NSW State Revenue Office came out with some very gloomy figures last night suggesting that stamp duty receipts have plummeted 18% or $1.3 billion in the last twelve months - that money will have to be made up from elsewhere.

Meanwhile, sales of new houses in Australia have fallen to their lowest level since 2001 - Wolf Street;

Sales of newly built detached houses in Australia plunged 6.7% in December 2018 from November, to just 4,622 houses, according to the Housing Industry Association (HIA), easily whizzing by the prior record low of 4,769 sales in August.

In the fourth quarter of 2018, sales plunged 14.9% compared to the fourth quarter in 2017. On this year-over-year quarterly basis, sales fell in all states and territories. Here are the results for the most populous states:

Queensland: -26.5%
New South Wales: -18.8%
Victoria: -10.9%
Western Australia: -7.9%
South Australia: -0.3%

The HIA report blamed “regulatory interventions” – in other words, the long overdue regulatory crackdown on mortgage fraud, the Royal Commission investigation into wrongdoing at the banks, and a crackdown on excessive housing speculation – for the decline.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
The NSW State Revenue Office came out with some very gloomy figures last night suggesting that stamp duty receipts have plummeted 18% or $1.3 billion in the last twelve months - that money will have to be made up from elsewhere.

don_dunstan
Which is why the states that were smart enough to use the good times to fund a surplus and even bank some money will not in general be affected.

Those states with Premiers hell bent on the ideology of "borrow borrow borrow" under the guise of "grow" will however have to explain rising debts and taxes to fund it or follow the historic path of simply leaving it to the next state govt to deal with. Then sit in the opposition benches and critic the govt for sacking staff and cancelling projects because they don't have any money and borrowing capacity has been severely reduced hence they are forced to balance the budget during a downturn. Yah for stupidity! Specifically looking at you Qld and to a lessor degree Vic!
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE

Meanwhile, sales of new houses in Australia have fallen to their lowest level since 2001 - Wolf Street;

Sales of newly built detached houses in Australia plunged 6.7% in December 2018 from November, to just 4,622 houses, according to the Housing Industry Association (HIA), easily whizzing by the prior record low of 4,769 sales in August.

In the fourth quarter of 2018, sales plunged 14.9% compared to the fourth quarter in 2017. On this year-over-year quarterly basis, sales fell in all states and territories. Here are the results for the most populous states:

Queensland: -26.5%
New South Wales: -18.8%
Victoria: -10.9%
Western Australia: -7.9%
South Australia: -0.3%

The HIA report blamed “regulatory interventions” – in other words, the long overdue regulatory crackdown on mortgage fraud, the Royal Commission investigation into wrongdoing at the banks, and a crackdown on excessive housing speculation – for the decline.
don_dunstan
Mostly driven by investor share dropping from 55% to 42%, this is a major bonus for those home owners wanting to enter the housing market and apart from the potential job losses from reduction in construction I'm yet to see the down side for the softening of the real estate market. Certainly well overdue and good for the country longer term.
  don_dunstan Minister for Railways

Location: Adelaide proud
I don't know, Shane, I'm inclined to look at the horrific scale of the losses and wonder how much longer the nation's financial systems can cop it. And according to CoreLogic's index for today 24/1 the quarterly plunges are increasing in Sydney and Melbourne:

Sydney -4.25% (17% p/a)
Melbourne -3.95% (15.8%)
Perth -2.63% (10.5%)

Poor old Perth has now been falling for four years - it's recently picked up pace again to make an official 16% slump since their peak in 2015. At some stage those poor valuations are going impact on borrowing capacity and maybe even liquidity?
  don_dunstan Minister for Railways

Location: Adelaide proud
Which is why the states that were smart enough to use the good times to fund a surplus and even bank some money will not in general be affected.

Those states with Premiers hell bent on the ideology of "borrow borrow borrow" under the guise of "grow" will however have to explain rising debts and taxes to fund it or follow the historic path of simply leaving it to the next state govt to deal with. Then sit in the opposition benches and critic the govt for sacking staff and cancelling projects because they don't have any money and borrowing capacity has been severely reduced hence they are forced to balance the budget during a downturn. Yah for stupidity! Specifically looking at you Qld and to a lessor degree Vic!
RTT_Rules
I don't believe the states had any choice but to ratchet up the debt in the face of huge numbers of migrants - almost 300,000 new permanent residents every year in Australia, that's slightly less than a Canberra added to the national population and every four years a new Adelaide. It's a fantastic amount of people, we have pretty much the highest rate of immigration in the developed world and it comes at a cost.

Of course there should be an infrastructure spend accompanying it to accommodate all these extra new Australians but most of the responsibility for providing this new infrastructure falls to the states themselves, hence we've seen an enormous building program in VIC in particular - couldn't believe the amount of new work everywhere you go the last time I was there - where they went to the extent of investing in a new metro style link directly through the city and down St Kilda Road in addition to the construction of a new road tunnel connecting the Westgate and Citylink. All this is costing big $$$ and has by and large fallen on Victoria to provide with some Commonwealth money (but not for everything); the level crossing removal project was mostly the VIC government's own money.

Anyway, no state is in really terrible shape apart from WA - which seems to be down to Colin Barnett not saving much of the proceeds of the mining boom - and the NT, which is so broke it will need a bailout from the Commonwealth of some sort. The others including my own of South Australia are all in reasonable shape fiscally - NSW especially seeing as they've just finished selling everything not nailed down including the Land Titles Registry.
  locojoe67 Assistant Commissioner

Location: Gen X purgatory/urban Joh-land
The Italian Govt has chosen to bail out two more banks in trouble, rather than exercise its EU 'bail-in' provisions.

https://hangthebankers.com/italy-government-bail-two-banks/

The RBA is on record as saying it will do whatever it takes to throw good money after bad:

https://www.abc.net.au/news/2018-12-07/reserve-bank-raises-prospect-of-rate-cuts-or-even-qe/10593562

Anything is possible. I'd be more concerned about the State and Local govts ability to fund their ongoing expenditure.
  don_dunstan Minister for Railways

Location: Adelaide proud
It's interesting to note that despite the rapid declines we've seen in house prices recently that we are still one of the most expensive places to live on earth - GQ Australia;

For anyone that’s been overseas, the first thing that becomes abundantly clear when you return to the homeland isn’t the fact that your friends are all engaged or expecting kids, no. It’s how shockingly expensive Australia is compared to the rest of the world.

But now you have some substantial evidence to back your claim; evidence that makes you seem like less of an incessant whinger and more of an intellectual who is on top of the latest news and pressing studies in the world of academic literature.

Every year, urban planning consultancy firm Demographia, releases its ‘International Housing Affordability Survey’ – which is basically one big old list ranking the world’s least affordable cities to buy houses (where the local population is over one million).

The findings of the 2019 survey have since been released and paint a bleak picture of the future for young Australians, particularly when it comes to home ownership. Not only did two Australian cities crack the top five of most expensive housing markets in the world, but all five major Australian cities ranked in the top 20 of least affordable housing markets.

According to the results, Hong Kong is the most expensive housing market in the world, a position they’ve held for nine years running. Taking out second spot was Vancouver, followed by Sydney and Melbourne in third and fourth respectively. As for fifth position, that goes to California’s San Jose.

But the bad news doesn’t stop there. If those of you in Adelaide and Brisbane thought you could gloat in the faces of your mates living in a decrepit garage that still costs upwards of $400/week (exc. WiFi) in Sydney and Melbourne, think again. Adelaide ranked at number 13, after London and Los Angeles. Not to be forgotten, Brisbane and Perth secured 17th and 20th place in the least affordable cities to buy houses in 2019.

We have a long, long way to fall before we become 'affordable' again. Adelaide being in the top-20 most expensive cities in the world is particularly perplexing, there's really no jobs or industry here apart from government defense spending and university education.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I don't know, Shane, I'm inclined to look at the horrific scale of the losses and wonder how much longer the nation's financial systems can cop it. And according to CoreLogic's index for today 24/1 the quarterly plunges are increasing in Sydney and Melbourne:

Sydney -4.25% (17% p/a)
Melbourne -3.95% (15.8%)
Perth -2.63% (10.5%)

Poor old Perth has now been falling for four years - it's recently picked up pace again to make an official 16% slump since their peak in 2015. At some stage those poor valuations are going impact on borrowing capacity and maybe even liquidity?
don_dunstan
What you are looking at is a drop from the peak, not everyone borrowed at this time, if you think that most properties carry a 25y or more loan, only a few % was bought. We haven't even got back to early 2016 prices yet. During the end of the boom, the banks were factoring in a drop and started to tighten lending practices thus reducing lending and borrowing risk against a drop.

So while a few percent of the total loan portfolio was borrowed at high prices, most was not and most houses still with loans are worth considerably more than originally.

There was no way this could have ever ended well for those buying property at the top. Even if housing prices simply flat lined, that means future borrowers are still paying more dragging disposal income out of the economy and placing greater risk of a recession. As it is now, new borrowers have $100/wk in their pockets.

I don't share Perth's projection of -10.5% annualised and even your own data above shows why this won't happen. It dropped 16% since 2015 total and is picking. Most of the hype BS from the boom is now out of Perth, the over supply has been mostly consumed and economic (read mining) activity is picking up. Likely Perth will finish 2019 flat or even up slightly.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Which is why the states that were smart enough to use the good times to fund a surplus and even bank some money will not in general be affected.

Those states with Premiers hell bent on the ideology of "borrow borrow borrow" under the guise of "grow" will however have to explain rising debts and taxes to fund it or follow the historic path of simply leaving it to the next state govt to deal with. Then sit in the opposition benches and critic the govt for sacking staff and cancelling projects because they don't have any money and borrowing capacity has been severely reduced hence they are forced to balance the budget during a downturn. Yah for stupidity! Specifically looking at you Qld and to a lessor degree Vic!
I don't believe the states had any choice but to ratchet up the debt in the face of huge numbers of migrants - almost 300,000 new permanent residents every year in Australia, that's slightly less than a Canberra added to the national population and every four years a new Adelaide. It's a fantastic amount of people, we have pretty much the highest rate of immigration in the developed world and it comes at a cost.

Of course there should be an infrastructure spend accompanying it to accommodate all these extra new Australians but most of the responsibility for providing this new infrastructure falls to the states themselves, hence we've seen an enormous building program in VIC in particular - couldn't believe the amount of new work everywhere you go the last time I was there - where they went to the extent of investing in a new metro style link directly through the city and down St Kilda Road in addition to the construction of a new road tunnel connecting the Westgate and Citylink. All this is costing big $$$ and has by and large fallen on Victoria to provide with some Commonwealth money (but not for everything); the level crossing removal project was mostly the VIC government's own money.

Anyway, no state is in really terrible shape apart from WA - which seems to be down to Colin Barnett not saving much of the proceeds of the mining boom - and the NT, which is so broke it will need a bailout from the Commonwealth of some sort. The others including my own of South Australia are all in reasonable shape fiscally - NSW especially seeing as they've just finished selling everything not nailed down including the Land Titles Registry.
don_dunstan
WA started to save in the mining boom, in fact they didn't borrow from the start rather using increased revenue to avoid borrowing or paying off debts they had faster. However they got greedy and when they did finally start to build a sovereign wealth fund it was too late and payments into it were short lived.

Qld is also in a mess, probably worse as its harder to bail out larger numbers, more than double the debt of WA and a govt who refuses to sell assets and rather borrow even more.

NT has issues, but small scale on federal level, they had to forward projected debt to 2030 to make the number look big.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
The Italian Govt has chosen to bail out two more banks in trouble, rather than exercise its EU 'bail-in' provisions.

https://hangthebankers.com/italy-government-bail-two-banks/

The RBA is on record as saying it will do whatever it takes to throw good money after bad:

https://www.abc.net.au/news/2018-12-07/reserve-bank-raises-prospect-of-rate-cuts-or-even-qe/10593562

Anything is possible. I'd be more concerned about the State and Local govts ability to fund their ongoing expenditure.
locojoe67
Dropping the interest rate would only have a more physiological effect than physical as the rate is so low it barely matters anyway and any change would be less than 0.5%, more likely 0.25%.

However if a lower rate sees a lower dollar, this will boost the economy (pity we don't make cars anymore), thus offset some/all any of the current easing in growth without the risk of pushing up housing prices.

Almost seems like a win win.
  don_dunstan Minister for Railways

Location: Adelaide proud
I don't share Perth's projection of -10.5% annualised and even your own data above shows why this won't happen. It dropped 16% since 2015 total and is picking. Most of the hype BS from the boom is now out of Perth, the over supply has been mostly consumed and economic (read mining) activity is picking up. Likely Perth will finish 2019 flat or even up slightly.
RTT_Rules
How does my own data show that 10% annualised losses aren't possible? Perth almost bottomed at this time last year and now the losses are picking up again. Depending on which figures you look at it has lost MORE than 16% since the peak in 2015.

CoreLogic daily indices for today (26/1) show that the losses in every capital city (except Adelaide) are picking up:

Sydney -4.33% (-17.32% p/a)
Melbourne -4.02% (-16.08%)
Perth -2.69% (-10.76%)
Brisbane/Gold Coast -0.56% (-2.24%)

Melbourne has cracked over 16% annual losses - nobody can know where any of these places will finish the year.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Perth has been dropping for 3 years for a total of 15%. Based on the fact the economy is improving now, much of the market glut has been absorbed and eastern migration pretty much over if not reversed and a bit of realism, it's hard to imagine a further drop of 10% for the calender year of 2019.

Would have been more accurate to state Q1 and YoY result than extrapolate a further 9mth.
  don_dunstan Minister for Railways

Location: Adelaide proud
Perth has been dropping for 3 years for a total of 15%. Based on the fact the economy is improving now, much of the market glut has been absorbed and eastern migration pretty much over if not reversed and a bit of realism, it's hard to imagine a further drop of 10% for the calender year of 2019.

Would have been more accurate to state Q1 and YoY result than extrapolate a further 9mth.
RTT_Rules
But the quarterly figures show you where the index is headed and at the moment Perth is falling 11% p/a despite what you say. It's not slowing down, it's speeding up. Sydney is almost at -18% now, Melbourne has cracked -16% with quarterly figures annualised, it might not last the whole year but at the moment the falls are picking up pace. Even Brisbane/SEQ has started to join the falls now, around -2% p/a.

Quarterly figures are really quite informative, they're the ones to watch to see which way a market is headed.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Perth has been dropping for 3 years for a total of 15%. Based on the fact the economy is improving now, much of the market glut has been absorbed and eastern migration pretty much over if not reversed and a bit of realism, it's hard to imagine a further drop of 10% for the calender year of 2019.

Would have been more accurate to state Q1 and YoY result than extrapolate a further 9mth.
But the quarterly figures show you where the index is headed and at the moment Perth is falling 11% p/a despite what you say. It's not slowing down, it's speeding up. Sydney is almost at -18% now, Melbourne has cracked -16% with quarterly figures annualised, it might not last the whole year but at the moment the falls are picking up pace. Even Brisbane/SEQ has started to join the falls now, around -2% p/a.

Quarterly figures are really quite informative, they're the ones to watch to see which way a market is headed.
don_dunstan
Ahh the risks of annualisation from a single point trend. This does not make it a year long trend.

Also who also buys houses leading up to Christmas so is the Q4 result seasonally adjusted?

I tell you what, rather than continue to argue the point.Place this thread in your diary and we can pick it up in Q2 with Q1 results and so on..
  don_dunstan Minister for Railways

Location: Adelaide proud
I've been watching these figures for a long time - I also understand a lot about statistics and I believe from my own observations that the quarterly figures are extremely informative about the underlying trend, hence it's good to annualise them and see what they say. I know that the figure for the next twelve months isn't necessarily going to be that annualised figure but again it's quite informative to see where its headed.

They're getting worse incidentally - CoreLogic's figures for today (28/1):

Sydney -4.5% (now 18% p/a)
Melbourne -4.04% (16.1%)
Perth -2.56% (10.2%)

Sydney's falls are picking up pace substantially, Perth has eased off slightly but is still clocking around 10% p/a falls at the moment. You have to wonder how much longer our Real Estate Institute Prime Minister can watch on the sidelines while Australia's biggest city suffers nearly 20% falls... it's pretty diabolically bad from a property investor's point of view.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I've been watching these figures for a long time - I also understand a lot about statistics and I believe from my own observations that the quarterly figures are extremely informative about the underlying trend, hence it's good to annualise them and see what they say. I know that the figure for the next twelve months isn't necessarily going to be that annualised figure but again it's quite informative to see where its headed.

They're getting worse incidentally - CoreLogic's figures for today (28/1):

Sydney -4.5% (now 18% p/a)
Melbourne -4.04% (16.1%)
Perth -2.56% (10.2%)

Sydney's falls are picking up pace substantially, Perth has eased off slightly but is still clocking around 10% p/a falls at the moment. You have to wonder how much longer our Real Estate Institute Prime Minister can watch on the sidelines while Australia's biggest city suffers nearly 20% falls... it's pretty diabolically bad from a property investor's point of view.
BElieve what you want, but expecting Perth to drop 67% in one year of what it has done in 3 years is a fools erran.  

We will pick this up in a few months when the evidence is clear and not guess work.
  don_dunstan Minister for Railways

Location: Adelaide proud
CoreLogic quarterly indices for 31/1/2019:

Sydney -4.53%
Melbourne -4.04%
Perth -2.75%

Perth has picked up, so has Sydney. Even Adelaide is registering slight drops now, almost the entire national market is falling.

Perth is now 11% annualised; Sydney over 17%. I'm not saying that this is what they'll drop this year, rather, that this is the pace that they're dropping at the moment. I was reading that Melbourne's biggest falls are concentrated on the Mornington Peninsula and the inner east - St.Kilda, Prahran, South Yarra, Richmond, it's by no means evenly distributed across the city.

Anyway by the time we get to Easter we'll have a better picture of what the year holds.
  don_dunstan Minister for Railways

Location: Adelaide proud
We are in the midst of a full-blown national real-estate crash and every day that goes by it gets even worse: Melbourne falls at fastest pace ever while Sydney enters uncharted territory (News.com.au);

Melbourne house prices have fallen at their fastest quarterly pace on record amid tightening credit conditions and souring sentiment ahead of the release of the banking royal commission’s final report next week.

CoreLogic figures released on Friday show national dwelling values declined another 1 per cent in January, bringing the cumulative decline to 6.1 per cent since the overall market peaked in October 2017.

The declines in January — although traditionally a tricky month due to low levels of activity — continue the housing market’s trajectory from 2018, which saw the weakest conditions since the GFC.

Sydney and Melbourne were down 1.3 per cent and 1.6 per cent respectively over the month, bringing their rolling quarterly falls to 4.5 per cent and 4 per cent and annual falls to 9.7 per cent and 8.3 per cent.

It's becoming the elephant in the room and hardly any politicans want to actually talk about it - I guess because they don't have an answer (more migrants?). I'd be astonished if the RBA didn't cut interest rates next week.
  don_dunstan Minister for Railways

Location: Adelaide proud
"Once worth a million, these Melbourne suburbs have now dropped below the magic median price" - none other than Domain:

There used to be 143 million-dollar suburbs in Melbourne – out of reach for many buyers. Now, there are noticeably fewer.

Across Melbourne’s inner and middle ring, 16 suburbs have seen their median house prices drop below the magic $1 million mark, new data shows.

Clayton in Melbourne’s south eastern suburbs took the biggest dive, with its median dropping from $1.15 million to $950,000 between December 2017 and 2018, according to the Domain House Price Report for the December 2018 quarter. Flemington, Lower Plenty, Collingwood and Chadstone made up the top five suburbs to tumble below seven figures, with Flemington’s median house prices dropping to a low of $881,500 in December.

Though the suburbs took a hit, all were still higher than Melbourne’s overall house price median which now sits at $833,321 after a drop of 8.4 per cent.

There's an extensive list of Melbourne suburbs with large falls - the bad news just keeps mounting up for the property industry. Those who have bought in the last few years are especially badly affected as they probably have very little equity.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
CoreLogic quarterly indices for 31/1/2019:

Sydney -4.53%
Melbourne -4.04%
Perth -2.75%

Perth has picked up, so has Sydney. Even Adelaide is registering slight drops now, almost the entire national market is falling.

Perth is now 11% annualised; Sydney over 17%. I'm not saying that this is what they'll drop this year, rather, that this is the pace that they're dropping at the moment. I was reading that Melbourne's biggest falls are concentrated on the Mornington Peninsula and the inner east - St.Kilda, Prahran, South Yarra, Richmond, it's by no means evenly distributed across the city.

Anyway by the time we get to Easter we'll have a better picture of what the year holds.
don_dunstan
Perth Rental market tightening

One for you Don, Perth Rental market drying up for tenants. Also references to excess stock in the market from the building boom that ended in 2015 starting to finally run out.

A further 10% drop this year looking even less likely, potentially the year might end positive.
  don_dunstan Minister for Railways

Location: Adelaide proud
Perth's rental market is tightening but bears no relationship to the miserable capital growth story, four years of going down and no sign of stopping.

At the moment still dropping at an annualised rate of 11%.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Perth's rental market is tightening but bears no relationship to the miserable capital growth story, four years of going down and no sign of stopping.

At the moment still dropping at an annualised rate of 11%.
don_dunstan
One more time

The construction boom finished in 2015 and left excess stock made worse by the eastern migration.

The excess stock is now mostly consumed, the rental market is now very tight and hence returns will rise.

Rising returns will see investors seeking to invest re-enter the market pushing up housing prices.

Additionally the mining sector is improving increasing employment in the west.

End result, 2019 is more likely to finish positive than negative and a single point trend extrapolated for 1 year that almost matches the losses since the crash from 2015 is completely absurd.  At least be sensible and quote a low single digit drop!

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