Property activity still sluggish - LandgateRemember Realtors are the biggest believers of their own HYPE & many have multiple investment properties that have heavy negative gearing as a investment strategy.
As soon as they build up equity in a property they draw down on it to buy another property & then another & then another.
This works fine in a rising market but is fought with danger when markets turn.
They article below highlights that the activity in WA property markets has dropped to 30 year lows.
Relators who have managed to sustain negative geared investments are now faced with incomes & commissions falling by 30% - 40% yet they still have to pay the bank every month regardless.
I know 6 Realtors with 30 houses & units between them who listed them for sale.
8 of these houses have been sold to date at average discounts of 15%. So whilst realtors say one thing their own actions speak louder than words.
Extract of a story from Perth Now Website:
THE State Government has confirmed that sluggish property activity in WA remains at levels not seen for more than a decade, despite a moderate increase in recent months.Landgate, the State’s official land information authority, today released its Business Activity Profile for May showing a mild increase in volumes over April on the back of historic lows.
The Business Activity Profile covers all property related documents lodged with Landgate and is a barometer of the state of the property market in Western Australia.
Landgate chief executive, Mike Bradford said while May was the busiest month so far in 2011, property activity was still the lowest May figure for sixteen years, and forty percent down on the boom years.
This followed the figure from April which was also a sixteen year low, and January and February figures which were the lowest for nearly two decades.
Mr Bradford added that total document lodgements for this financial year had Western Australia on track to have the lowest levels of activity since the early 1990s.
“Given Western Australia’s population was thirty percent less 20 years ago, comparatively the slump in property activity is worse than the severe downturn of the early 1990s”, Mr Bradford said.
Overall activity for 2010-2011 is one third down on the peak of 2005-2006.
The Business Activity Profile provides the daily average of all documents lodged, with sections detailing land transfers, mortgages, caveats, searches and other categories of property related documents.