We were more than happy to continue renting. The market in Perth had shot up through the roof over the last few years before we arrived, and it was clearly a boom that couldn’t (and wouldn’t last).
The mining boom was in full swing, and everyone was very bullish.
The kids were in the local primary school, which they could walk to.
They had a garden. Their own bedroom!
So life was good.
Then everything changed.
In 2006, the owners of the home we were renting returned from living overseas and wanted to take the house back. The agent told us they been renting it out for the past 10 years! But they were coming back!
ANOTHER reason to buy and NOT rent. It was very disrupting.
BUT I am sure MANY of you have been in the same position, and that’s not the lesson of this story.
What happened next is the key takeaway.
Let’s look at the Perth price chart. Look at firstly around 2006.
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From the chart, in May 2006 the owners arrived and wanted the house back. I had been renting for a couple of years before that, missing out on the huge price growth. BUT I was paying relatively low rent, so I was OK with that as I had other commitments anyway and didn’t want to have to buy.
But WE HAD TO FIND ANOTHER HOUSE to rent, but because of the boom, both mining and property prices, there was virtually NO rental accommodation available! None. Very similar to the situation in 2024.
So we made a huge decision to try to buy in 2006.
Even though I KNEW it was expensive and didn’t really think prices would keep going up. An even though we knew prices were at or close to the top. But there was simply virtually nothing to rent, and we didn’t want the same situation of having to move out again.
BUT we needed somewhere to live, so I told myself that we at least would have a roof over our heads and would save on the rent. BUT, there was very little property to even buy! Just like in 2024 again!
All properties coming on the market were being snapped up at huge prices.
And owners were withdrawing properties from sale, thinking they would get higher prices by waiting.
And properties that were available, were only being sold by “highest bidder” in a silent auction, so you didn’t know what others were offering.
Luckily, I had already had over 20 years experience in real estate at that time, and was able to navigate the "silent auction" successfully.
But I would be kidding to say anything else than it was a very tough, and extremely stressful, market to buy into.
Somehow though, we scrapped the deposit together, got a loan, and managed to buy a home in the same area, just a street away, fighting off over 10 other buyers.
Prices were very high. $1.5 million! Back in 2006!
So we secured a decent 5 bedroom home sitting on 809 sq metres of land.
As you can see from the price chart, I purchased very nearly at the top of the market after a very long boom.AND you can clearly see prices did not move for years and years. The home was worth only what we paid for over a decade later.
And I had a large mortgage, so interest was going out every month.
Here are my key takeaways:
- If you have a young family, try to buy rather than rent. You don’t want the stress of having to move regularly.
- Don’t wait for the market to be booming before buying. There will be very little available, and it will be highly priced.
– There is no guarantee prices of houses will always go up. They often go sideways for years.
– But the security of capital preservation is there even in a down market. Unlikely you will lose your shirt!
- Good houses are always in demand. It’s just the price that needs to be determined.
– Add value if you can. Add a “granny flat’ or a second story where possible.
- Don’t let a house get run down. Keep the maintenance up.
And get professional help when buying especially if it is a strong market.
Every family has their story. This was mine. It’s also the reason I’ve dedicated my life to the things you hear me talking about all the time. Helping families with their move and housing back home, or to Australia. This picture was taken in 2004 at my daughter’s birthday party, in the garden of the home we rented when we arrived in Perth. Happy Days!
If you are even thinking of buying, in the next 30 or 300 days, let's chat!
Happy to share my experiences of renting, and buying, when transferring from Asia to Australia.
