A lovely 3x2x2 villa in Carlisle which we probably paid too much for - EEK! But the right one for us especially in terms of location in the suburb. There has quite a bit of competition in the area and we jumped in and got it before the home opens happened.
Perth - Start of New Boom 2011 ?
- Thread starter Alex P Keaton
- Start date
A lovely 3x2x2 villa in Carlisle which we probably paid too much for - EEK! But the right one for us especially in terms of location in the suburb. There has quite a bit of competition in the area and we jumped in and got it before the home opens happened.
Too much? What does that mean? $1 or $1000000
If it was $10k less it would have been an even better buy!
10k less. So the purchase price was...?
What we were willing to pay
Interesting article that indicates good things for Perth, Syd and Ad over the next 3 years:
http://money.ninemsn.com.au/article.aspx?id=8104428
http://money.ninemsn.com.au/article.aspx?id=8104428
Hey Ausprop
I just received an email that I hope will not put the brakes on the mother of all resources booms as you put it. Here is the email.
Tuesday News update for you...
Resources companies warn that a wages explosion risks putting the brakes on the nation's minerals boom. Unions have taken advantage of the tight labour market, recently negotiating pay deals that deliver average welders as much as $2000 a day, causing employers to reassess the viability of future projects. Several resources company executives told The Australian that unions had them "over a barrel" on pay negotiations because industrial relations laws had no provision for arbitration of disputes on offshore rig construction projects, which were classified as greenfield worksites.
It was impossible to fight the claims, the executives said, because this would expose them to massive holding costs and delays with no prospect of resolution. Resources Minister Martin Ferguson yesterday confirmed mining executives had expressed concern about the problem and asked the government to review the laws.
The Australian Workers Union blamed employers for the arbitration issue, saying they opposed the inclusion of arbitration when the law was being framed but later shifted ground. "I make no apology," AWU national secretary Paul Howes said yesterday. "We are a union, and our job is to secure good wages and conditions for our members. If we know we can get it, we will get it."
Industrial Relations Minister Chris Evans said through a spokesman that when the Prime Minister was drafting the Fair Work Act, she did not receive any submissions calling for arbitration of greenfields construction agreements.
Resources companies have sections of new oil rigs built overseas but negotiate with Australian unions over wages and conditions for the short-term construction projects necessary for installation. It is understood the recently finalised agreement for construction of rigs on the Kipper Tuna Turrum project, in Bass Strait, included pay levels 30 per cent higher than last year's. The cost of the oil and gas project, a joint venture between ExxonMobil and BHP Billiton, is understood to have blown out by $160 million because of the deal.
The deal is understood to have included a $90-a-day allowance because workers, who sleep in derrick barges, have to share toilet and bathroom facilities. Sources said the agreement, yet to be made public, included generous allowances but unions did not offer any productivity gains in return. ExxonMobil refused to confirm details of the agreement. But last month, similar agreements were reached for the demolition of the West Atlas PTTEP Australasia rig, which caught fire off Western Australia last November.
Contractors running the demolition have to pay workers $60 a day because they do not have personal cabins on their accommodation barges, plus an extra $30 a day "where an employee is required to share an en-suite cabin ablution facilities" with other personnel. The agreement provides a base rate of $50 an hour for workers, an $88-a-day remote area allowance, $500 in allowance to travel to the point at which they are picked up and taken to work and $1000 a week for the "unique and special work requirements"
involved. The agreements included a bonus worth 15 per cent of gross earnings on completion and a "redundancy accrual" payment at the end of the job worth an extra $170 a day for each day worker. Workers get a 17.5 per cent shift allowance between Monday and Friday, an extra $1.80 an hour for electricians plus 11 per cent superannuation, income protection insurance and accident make-up pay.
Industry sources conceded the demolition was more challenging and dangerous than standard construction work, but pointed to the agreements as evidence of what they described as the excess being pursued by unions on offshore construction projects. They said unions had sought similar pay and conditions in negotiations in a recently completed but yet-to-be-published agreement for the construction of US company Apache's Reindeer project off Western Australia.
A spokesman for oil and gas company Woodside said the past 12 months had seen "a significant and unsustainable escalation" in offshore construction pay rates. "That escalation follows recent excessive outcomes in the offshore maritime sector," the spokesman said. "Excessive wage outcomes not linked to productivity increases represent a considerable concern to the oil and gas industry."
Executives told The Australian they feared the generous conditions would create a new base level for negotiations, with the spiral set to make future projects uneconomical. "They use the last big claim as the starting point for the next negotiation - they will never accept anything less," said one executive. He said he had worked in the industry around the world and not encountered an industrial relations environment like Australia's. "In the interest of our shareholders, when it comes to projects in the future we are now looking at Australia from an affordability perspective," he said.
Mr Ferguson said executives had told him many projects were at the "no turning back" stage but excessive wage bills could affect the viability of future projects.
I am in the business my self and can see the potential for the mother of all resources booms forming. I just hope the unions don't kill it.
I recieved this from a guy I just finished working with but am unaware where it came from originally or whether there is any truth to what was said. Just wanted to share.
Regards
Hi regrow,
It was a article in the Australian/news.com
http://www.news.com.au/business/oil...rn-of-high-wages/story-e6frfm1i-1225936903076
It was a article in the Australian/news.com
http://www.news.com.au/business/oil...rn-of-high-wages/story-e6frfm1i-1225936903076
Oil companies were selling oil at $20 a barrell and were making money
Gold companies were selling gold at $400 an ounce and making money
BHP and RIO will make $10B + profits still with iron ore prices where they are.
And gas prices are predicated on oil prices, so don't stress too much about them.
Let me show you how it works: Unions claim their members can't pay the utilities bills. Employers claim higher wages will kill off investment and there will be no boom. And yet they somehow agree somewhere in the middle and the world doesn't end, despite the best efforts of both parties.
It's the same in politics, football, buying gold watches in Bali etc etc.
Workers won't kill off the resources boom, lower prices will. Whether that is next week, next year or next decade, depends on which economist you ask...
Gold companies were selling gold at $400 an ounce and making money
BHP and RIO will make $10B + profits still with iron ore prices where they are.
And gas prices are predicated on oil prices, so don't stress too much about them.
Let me show you how it works: Unions claim their members can't pay the utilities bills. Employers claim higher wages will kill off investment and there will be no boom. And yet they somehow agree somewhere in the middle and the world doesn't end, despite the best efforts of both parties.
It's the same in politics, football, buying gold watches in Bali etc etc.
Workers won't kill off the resources boom, lower prices will. Whether that is next week, next year or next decade, depends on which economist you ask...
section 457 visas are a great cure for the local malaise.
Why's that?
Looking at the posts and deletion list above, things must have gone pear shaped 
I agree with one of the other threads stating that all is good until tommorows next headline, the below is a recent one for WA
Three homes repossessed a day
I agree with one of the other threads stating that all is good until tommorows next headline, the below is a recent one for WA
Three homes repossessed a day
Signs of next upswing are starting to show
Hi All,
I am a first time posting to this forum. I have a view that the next upswing in Perth is just starting. It is always difficult to determine the start of an upswing as it begins when masked with negative media coverage at the end of a downturn!
What do I see as the drivers?
- Major investment and job creation in the mining industry.
This upswing has been partially masked as the global down turn had a large impact on the major job creating mining sector. On the other hand, it had little impact on the oil and gas sector which is booming now. I work in oil and gas and many people are not aware that it has a very low level of employees for the dollars invested. Particularly as many of the design and construction jobs are off shore. The minerals sector has a much higher level of employment and it is only just starting to re-invest its recent high earnings. From mid-2011-2012 when the iron ore expansion takes hold, it will be clear in Perth that the boom has started. The current peak in the sector is a little unclear, however I can seen clear and continual expansion until 2013-2014 when looking at individual companies construction timelines.
- Major increase in public sector investment after a 2 year down turn.
The GFC hit the state budget hard. There is currently a small level of investment in the construction of infrastructure by the state budget (compared to what will happen soon). This limited investment was caused by a downturn in both stampduty and mining royalties and public sector wage hangover from the last boom. With the recent boom in prices, the state coffers will be invested in infrastructure soon. Basically there is a lag of over 2 years from when the minerals are dug up, to when the state profits are received and invested in jobs on the ground. In 2011-2013 there will be a large increase in public sector construction
- Major increase in private sector housing
At the moment there is a hangover of houses. This will take a year to completely work through, however there are signs that it is being resolved. The start of an upswing traditionally starts in the inner ring suburbs. The recent falls in house prices has masked a minor upswing in the inner areas (eg. South Perth, Shenton Park). As the number of public sector and private sector jobs increases and the oversupply shrinks, the housing market will turn. When it turns, it will be driven by base demand that is not driven by government stimulus. Once the immigration begins to increase to fill the public and mining sector jobs, there will be an upswing in private sector housing construction.
The combination of these 3 sectors will create the next boom. I believe you need the mining, public and housing sectors to be running on all cylinders to cause a price upswing. Interest rates may slow the market, but it will not stop it. This is because the east coast house market and employment will begin to fall before WA and Perth. This will limit the level of interest rates to about 10% (which was the breaking point on the east coast last time).
Welcome comments and alternate views? Hope my post may be of interest to someone out there?
In case people want to know my personal interest, I own a rental in Perth (purchased 2005) and one in Canberra (purchased 1998). I recently sold another property in Canberra (purchased 2004) after the end of the recent upswing. I plan to sell my perth rental in 2014 after a 20-30% increase in value and re-invest on the east coast.
Hi All,
I am a first time posting to this forum. I have a view that the next upswing in Perth is just starting. It is always difficult to determine the start of an upswing as it begins when masked with negative media coverage at the end of a downturn!
What do I see as the drivers?
- Major investment and job creation in the mining industry.
This upswing has been partially masked as the global down turn had a large impact on the major job creating mining sector. On the other hand, it had little impact on the oil and gas sector which is booming now. I work in oil and gas and many people are not aware that it has a very low level of employees for the dollars invested. Particularly as many of the design and construction jobs are off shore. The minerals sector has a much higher level of employment and it is only just starting to re-invest its recent high earnings. From mid-2011-2012 when the iron ore expansion takes hold, it will be clear in Perth that the boom has started. The current peak in the sector is a little unclear, however I can seen clear and continual expansion until 2013-2014 when looking at individual companies construction timelines.
- Major increase in public sector investment after a 2 year down turn.
The GFC hit the state budget hard. There is currently a small level of investment in the construction of infrastructure by the state budget (compared to what will happen soon). This limited investment was caused by a downturn in both stampduty and mining royalties and public sector wage hangover from the last boom. With the recent boom in prices, the state coffers will be invested in infrastructure soon. Basically there is a lag of over 2 years from when the minerals are dug up, to when the state profits are received and invested in jobs on the ground. In 2011-2013 there will be a large increase in public sector construction
- Major increase in private sector housing
At the moment there is a hangover of houses. This will take a year to completely work through, however there are signs that it is being resolved. The start of an upswing traditionally starts in the inner ring suburbs. The recent falls in house prices has masked a minor upswing in the inner areas (eg. South Perth, Shenton Park). As the number of public sector and private sector jobs increases and the oversupply shrinks, the housing market will turn. When it turns, it will be driven by base demand that is not driven by government stimulus. Once the immigration begins to increase to fill the public and mining sector jobs, there will be an upswing in private sector housing construction.
The combination of these 3 sectors will create the next boom. I believe you need the mining, public and housing sectors to be running on all cylinders to cause a price upswing. Interest rates may slow the market, but it will not stop it. This is because the east coast house market and employment will begin to fall before WA and Perth. This will limit the level of interest rates to about 10% (which was the breaking point on the east coast last time).
Welcome comments and alternate views? Hope my post may be of interest to someone out there?
In case people want to know my personal interest, I own a rental in Perth (purchased 2005) and one in Canberra (purchased 1998). I recently sold another property in Canberra (purchased 2004) after the end of the recent upswing. I plan to sell my perth rental in 2014 after a 20-30% increase in value and re-invest on the east coast.
Fair enough Jay but:
1) sentiment is low currently
2) affordability remains an issue
It's more likely that the market continues to move sideways and if any growth occurs it will be slow and steady of around 3-5%. Don't know about 20-30% increase in value over the next four years - we're coming off the back of one of the biggest booms ever and it's time for a rest period.
1) sentiment is low currently
2) affordability remains an issue
It's more likely that the market continues to move sideways and if any growth occurs it will be slow and steady of around 3-5%. Don't know about 20-30% increase in value over the next four years - we're coming off the back of one of the biggest booms ever and it's time for a rest period.
