Monday, May 31, 2021

House Prices to Fall? Blame Iron Ore in China

 So you may have heard that the iron ore price in the world is falling but why is this important to those looking for a home in Perth? Since Australia is the biggest player in iron ore right now, when the price of iron ore goes up, so does our Australian Dollar. This is because there is an increase in demand for the AUD as the value of iron ore goes up. When the price goes down, so does the dollar. The drop in the Australian Dollar means that overseas investors Australian assets decrease in value as well. When the outlook is bad for the AUD, it means people will consider the risk of buying a house in Australia. 

The iron ore price has been forced down recently by China demanding that stockpiles of iron ore be used first in China while they source for more iron ore from anywhere other than current thorn in their side, Australia. This decrease in demand has driven the price down and there are warnings that the AUD could be greatly impacted in the coming months. On the contrary, with a drop in AUD, couldn't the interest overseas increase in Australian property? only if they think that the AUD won't drop any further and right now, that's no certainty. 

Friday, May 28, 2021

Getting Smart About Where you Buy in Perth

There has been renewed predictions that Perth is going to experience an upturn for real estate prices and as always, now is the best time to buy. As many people go out to look for a home, especially those that have been squeezed out of the rental market, there are some things you need to think about. 

Firstly, you need to think about why you are going to pay the price for the house that you are targeting. Some people buy into a suburb for a particular school in the area and that can bring up the price for the house by $250,000. If you are not moving in for the school, perhaps consider another suburb without such a premium. 

The other thing is how much of the price is based on perceptions from other people. Some suburbs just have a bad name but if you are ok with that, you can save yourself a few hundred thousand dollars. Crime is everywhere and the idea of buying into a safe suburb could just be buying into a false sense of security. If you were a thief, would you just focus on your neighbourhood? 

Also convenience like proximity to a train station or school may look like a good idea, but you might want to think about what else that proximity brings. More people walking past your house, or a logjam every morning and afternoon as the school dropoff turns your street into a car park. The proximity to a train station could also invite more uninvited guests into your street. 

Remember when you are buying a house, why you are buying where you are, and not just follow the Jonses. You might save yourself a huge amount.

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