NSW on Brink of Recession???

[tigerGT]

NSW on brink of recession
By Simon Benson, Political Reporter

December 07, 2006 12:00

NSW is barrelling towards a recession with official data revealing it is the worst performing state in mainland Australia.

Reeling from the State Government's failed vendor tax and a collapse of investment, NSW was already facing the most dire economic conditions in more than a decade.
Now the drought and eight interest rate rises since the past federal election in 2004 have plunged the economy into negative territory.

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From http://www.news.com.au/dailytelegraph/story/0,22049,20883192-5007132,00.html


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Hello All,

In the last three days I have started hearing about this more and more often. It isn’t dominating the news story however it is getting a mention every now and then. I’m interested to know, based on views from Property Investors who have seen at least a few cycles whether this media mention of the recession is just part of the usual or is it different this time? I mean I have read the exaggerated property doom and gloom news stories published by writers who don’t even own a property come and go. I dismissed them. However it feels different this time, It is as though this so called recession is inevitable and the current news stories are there to warn us rather than to make for good reading.

I would be interested on people’s views on this story, its likeliness and its impact on the rest of the Country. I mean is it possible for a state to enter a recession whilst the eastern side of the country is booming??? Surely there needs to be some sort of Domino effect to follow.

Look forward to your responses

 

[MarkB]

I do think it is possible for NSW to enter a recession while the western (I think you meant to say) side of Australia is booming.

1 country, but 2 very different economies.

We all know that WA is surging ahead on a resources boom, but why's NSW slow sluggish?

Well, over 18 months ago Ross Gittins had this to say:

NSW's economic growth has been lagging well behind the other states for several years

So what's our problem? Well, one factor that's probably been both a cause and an effect is very much lower growth in population*. NSW population growth decelerated sharply in 2001 and 2002 and hasn't recovered since.

Part of the problem has been a fall in net overseas migration to NSW but increased net outflows of residents to other states have accounted for about two-thirds of the slowdown in population growth...


But I wouldn't worry about it unless your IP(s) are in an area with a declining population. Imho property investing is all about bums on seats.

M

ps. The answer to your question is a no-brainer. NSW is on the brink of a recession, the real question is whether it matters or not. I'm not convinced it does.

 

[FrankGrimes]

How will the reserve bank handle two different economies? I heard on the news last night that Tasmania is already in recession and VIC and NSW are not far off.

Has the RBA already gone too far with interest rates?

 

[topcropper]

ps. The answer to your question is a no-brainer. NSW is on the brink of a recession, the real question is whether it matters or not. I'm not convinced it does.

I think your statement is spot on Pitt Street.

While ever WA keeps pumping out the exports, and the other states can chip in and help a bit, and if this rotten flippen drought can hurry up and end, then NSW's woes wont matter a great deal in the grand scheme of things.

House prices in this state got way ahead of themselves in 03, and this is just a bit of pain we must go through as punishment for the over exuberance. It's good to see other parts of the country having their turn for once, rather than it being all Sydney/Melbourne. Think of it like as an evening up of the wealth to parts of the country that are the producers.

See ya's.

 

[jazzmoo]

How will the reserve bank handle two different economies? I heard on the news last night that Tasmania is already in recession and VIC and NSW are not far off.

Has the RBA already gone too far with interest rates?

Well, you certainly wouldn't know it in Tasmania's case by looking around. In Hobart over the weekend and couldn't move in the shops. Myer didn't have enough staff to cover the lines at the counters. CBD was crawling with shoppers. Back in Launceston for shopping earlier in the week and it's the same story. More expensive European cars on the roads than ever. More traffic than ever. Real estate market seems fine. I'm not sure statistics actually tell the truth at the end of the day.

 

[trajik]

The stats are only reflecting GDP, which is very generalised across the states. As with everything, one market may be going down but another is going up, and another static.
The "Recession" is a technical recession, ie; subsequent quarters of negative GDP growth, but unless you're selling into it why does it really matter, as long as it recovers, which it will, and you keep your job, if you have one.
History always repeats in varying degrees, so this time is not different, it's just that each time a recession or boom occurs there are new poeple experiencing it for the first time, and so they get caught up in the emotion and media attention.
Just sit back and relax....? and keep a look out for some good opportunities...

 

[tigerGT]

Well, you certainly wouldn't know it in Tasmania's case by looking around. In Hobart over the weekend and couldn't move in the shops. Myer didn't have enough staff to cover the lines at the counters. CBD was crawling with shoppers. Back in Launceston for shopping earlier in the week and it's the same story. More expensive European cars on the roads than ever. More traffic than ever. Real estate market seems fine. I'm not sure statistics actually tell the truth at the end of the day.

Wow, now theres a recession I dont mind having

 

[Peter 14.7]

Well, you certainly wouldn't know it in Tasmania's case by looking around. In Hobart over the weekend and couldn't move in the shops. Myer didn't have enough staff to cover the lines at the counters. CBD was crawling with shoppers. Back in Launceston for shopping earlier in the week and it's the same story. More expensive European cars on the roads than ever. More traffic than ever. Real estate market seems fine. I'm not sure statistics actually tell the truth at the end of the day.

Exactly, I posted elsewhere that reported in the Age today is a Survey of Credit Card Use which reports last month was huge and December is looking to break all records.

No doubt some areas say housing may be getting tight but not consumer spending.

If NSW does go into recession the biggestimpact may be voters in the March 07 election could throw out the Labour Gov?

Peter 14.7

 

[Sultan of Swing]

Well, you certainly wouldn't know it in Tasmania's case by looking around. In Hobart over the weekend and couldn't move in the shops. Myer didn't have enough staff to cover the lines at the counters. CBD was crawling with shoppers. Back in Launceston for shopping earlier in the week and it's the same story. More expensive European cars on the roads than ever. More traffic than ever. Real estate market seems fine. I'm not sure statistics actually tell the truth at the end of the day.

I have to agree. We've just had our best month in over 2 years and its FELT like a mini boom coming on for the past few months already. There's still a lot of land selling, mostly to poeple that want to build for PPOR's etc and there's still a long wait for builders, up to 12 months.

Vacany rates are also at the lowest I've seen in 15 years. We ahve plenty of people looking for places to rent but often no vacanies.

I can only speak for my area, which is the North West Coast, but from what Jazzmoo has posted, it sounds like it's state wide.

 

[hb1]

Hi Sultan of Swing

"Vacany rates are also at the lowest I've seen in 15 years. We ahve plenty of people looking for places to rent but often no vacanies"

you might want to direct the people to realestate.com.au..
there's over 200 property for rent just in the Launceston Area alone....

 

[sailor]

Some have said the declining population in NSW is the problem, whilst others suggest voting out the Labour State Govt will solve the problem. Can someone explain this in a bit more detail please? I'm just not sure how changing the govt will stop the declining population?

 

[alexlee]

When things go wrong, people will look for someone to blame. The opposition will no doubt say they have ways to reverse the declines wrought by the current party. Whether it actually works....

The other side also does the same. Howard has taken credit for the economic growth period we've had. Whether his policies were actually responsible for that..... who knows.
Alex

 

[XBenX]

Well, you certainly wouldn't know it in Tasmania's case by looking around. In Hobart over the weekend and couldn't move in the shops. Myer didn't have enough staff to cover the lines at the counters. CBD was crawling with shoppers. Back in Launceston for shopping earlier in the week and it's the same story. More expensive European cars on the roads than ever. More traffic than ever. Real estate market seems fine. I'm not sure statistics actually tell the truth at the end of the day.

And your sample group of one, your observations are more likely to be correct.

Get a grip.

 

[Peter 14.7]

Hi Sultan of Swing

"Vacany rates are also at the lowest I've seen in 15 years. We ahve plenty of people looking for places to rent but often no vacanies"

you might want to direct the people to realestate.com.au..
there's over 200 property for rent just in the Launceston Area alone....

Sultan is North West Tassie. Beautiful area with rugged beauty and rugged roads.

Launceston is a good hour or more away. Bit like comparing Melbourne with Bendigo or Shepparton in Vic.

Peter 14.7