South Australia in recession: ANZ bank

[Harris]

http://www.news.com.au/story/0,23599,22243219-2,00.html

SOUTH Australia's economy has gone into recession, a new economic report published today by the ANZ bank says.

The latest biannual ANZ Australian Property Outlook Report says the state is experiencing "weakening economic activity... employment has stalled and economic growth has weakened sharply".

ANZ economists advise: "The state is now in technical recession following two consecutive quarters of economic growth".

The report also warns SA is still losing significant population numbers to other states and "the trend is rising sharply".

Opposition Leader Martin Hamilton-Smith accused Premier Mike Rann and Treasurer Kevin Foley of relying on a "coming mining boom while they have taken their eye off other industries".

"It's almost impossible that in a time of record low unemployment across Australia that this state finds itself in an economic recession," Mr Hamilton-Smith said.

 

[LynnH]

Harris

A very interesting post!!!

Hubby and I spent 10 days in SA about 2 months ago, with the view to buy 1 or 2 investment properties in the northern suburbs. We first lived there in 1977 and left there to return to the eastern states in 1985. When we visited recently, we looked extensively around the areas where we had lived (Elizabeth, Salisbury, Munno Para) and other areas we knew well. Try as we might, we could not find anything to indicate we should invest there - the areas where we had lived still looked the same 29 years later, there were many vacant shops, vacant car yards, and many of the areas looked tired and unloved. The area on Main North Road around Gepps Cross was much the same, and there was still the same graffiti on the water tower (or whatever it is)!

There was much new development - new shopping centres in Elizabeth, Munno Para shopping precinct unrecognizable, and here were new housing areas, granted - but Mawson Lakes, for example was, in our view, overpriced and unappealing - and if I remember from when we lived there, is built on an area that was boggy and under water when it rained.

The areas further south held much more appeal - e.g. around Flinders Uni, Belair, Blackwood and other areas nearby and in the Semaphore area and further south- but prices were almost as much as they were in Brisbane. We felt that Brissie had a much more dynamic economy than did SA - one of the things that concerned us was that the economy there seemed to be built mainly on 'digging stuff out of the ground' and on Defence industries and expansion, and that a change of government federally may have an impact on all of that.

For the reasons outlined above, we decided not to invest in SA - reading your post reinforces that decision.

Cheers
LynnH

 

[firstmillion]

So much of condradiction about SA

Being in Adelaide for over an year now, the place is really buzzing and there are lot more jobs. I met Joseph Chou, co-author of one of the books on properties, and he was very upbeat about SA.

With billions of dollars in investment poured into SA. I wonder how true is this report ?

Cheers

 

[aef]

I AGREE THE STATE IS IN RECESSION!!!!!

Now all interstate buyers please stay away

 

[Rogo202]

I AGREE THE STATE IS IN RECESSION!!!!!

Now all interstate buyers please stay away

Know excactly what you mean.

I had to contest against about 4 Perth and 2 Melbourne bidders to get my PPOR in Exeter.
Now that its under contract feel free to come back and push prices up

 

[sue78]

Lynn - don't think you can really compare SA to brissy. I lived there for most of my childhood and we were there this year...nothing much has changed. The Angle Vale area seems to have been developed a bit...used to be all farm land owned by vietnamese.

In terms of employment and pay, SA is rubbish. I couldn't find work after Uni and headed to Sydney like most of my friends are everywhere now. Pay is low compared to Sydney and Melbourne but it's not far behind Bris.

As for property....it's interstate buyers dream. I was always 100 phonecalls too late! Gave up after a few weeks. Properties there are very cheap...especially in the nouthside but the yield is also quite low. You can still rent houses for $150 p/w...that's un heard of in Bris even in Woodridge and Inala that's impossible.

The coffee and vietnamese food is better in adelaide though.

 

[Pushka]

Yes, we do have the best restaurants in SA, Indian and Thai too! Where else in Australia can you buy the best Indian food for under $14 a main! We have had Indian food in well known Sydney Brisbane and Melbourne restaurants that were double the price and half the flavour. There is a nice Indian restaurant in Noosa though!

 

[jasperjue]

Horses for courses i'd reckon. I personally don't like Perth but i wouldn't denigrate it on the fact that its so isolated and remote that you probably still think digital watches are hip and that you need a gazillion dollars to afford a decent house.

I reckon its cool that you and others won't be investing here...more for me and us SA noobs who see potential in the areas where yields are growing and cg is climbing steadily.

Go Christies!

cheers

 

[letiha]

Well i hope that means that the work drys up for my dad who is in Adelaide, he is a builder/carpenter. He has so much work on he can't even come up to do little bits of work.

No work then he can come and build for me.

 

[mystery]

To all the SA knockers,

If SA is in recession then all I can say is that I hope it continues, .... my IP's are doing great.

You don't have to like a place when buying an investment property, ... It's purely business. As long as the numbers work, the property can be tenanted and the IP's create wealth for my wife and I .... who cares what people think of the place.

Martin

 

[redsquash]

Check out page 34 where Adelaide has peaked at the top of the property cycle.......they don't have an Adelaide office by the way

http://www.htw.com.au/Downloads/Files/181_July_2007_Month_in_Review.pdf

 

[LynnH]

Sue

I didn't directly compare Brissie with Adelaide (nor did I intend to 'knock' SA, mystery) - sorry if I gave that impression in my post. We simply thought that Brissie was much better value than Adelaide and that we would do better by continuing to invest here.

Gotta say that I agree with Pushka about Adelaide's restaurants and eateries - I'd forgotten how good they were! We went to one tavern on the south side of the city (can't remember the name) where they had schnitzels the size of dinner plates that were melt-in-the-mouth tender - and to the Pavilion at Semaphore where we had the best 'counter lunch' I've had in ages!

Cheers
LynnH

 

[Harris]

Check out page 34 where Adelaide has peaked at the top of the property cycle.......they don't have an Adelaide office by the way

http://www.htw.com.au/Downloads/Files/181_July_2007_Month_in_Review.pdf

Thats old new redsquash and I wouldn't read too much into HTW reports anyway.

Aug report has Melbourne, Adelaide, Hobart, Darwin and Canberra at Peak of property cycle and Perth as declining market. Having said that inner melbourne still seems to be steaming along well and so is the outer bayside suburbs which are on fire.

I have started tracking Elizabeth in SA and the whole area has massive demand and hardly any available properties for sale. The demand is spreading well beyond Elizabeth and into adjoining suburbs which represent great value with decent yields. There is still massive amount of mining driven infrastructure to go there which will further exacerbate the demand for housing there. However the loss of population could be a worrying trend, if its not a short term blip and is ongoing.

Will be interesting to watch how the SA economy is tracking in this quarter and next.

Harris

 

[DKinvestments]

Umm so this is what recession is like

Well if this is recession time in SA, i cant wait for SA to BOOM...

I must have also missed the prev so called Recession in SA 5 years ago -

 

[Xenia]

If it's not even clear whether it is in a recession or not and property prices are continuing to climb then surely it's not affecting anyone too much and it's a non issue.

You can label it as a recession or whatever you want, call it kangaroo if you want it's still a great place to be buying properties in!!!!!

 

[Rogo202]

Sue

.

Gotta say that I agree with Pushka about Adelaide's restaurants and eateries - I'd forgotten how good they were! We went to one tavern on the south side of the city (can't remember the name) where they had schnitzels the size of dinner plates that were melt-in-the-mouth tender -

Cheers
LynnH

That prolly would have been the Earl Of Leicester. That chef is now at the Coopers Ale House, and yes the shnitzels are just as big and tender.

 

[steveadl]

It's OK, over here we know 'Adelaide Bashing' is a national pass time, I'm used to it If Adelaide makes me rich and I don't have to travel 1hr to work each way - fine by me

 

[alexlee]

Overseas many people think Australia is the back of beyond. My friends keep telling me to invest in Asia instead 'where the growth is' and I've had friends ask me why I would invest in a backwater like Australia (got the same advice when my Sydney friends found out I was buying in Brisbane - in 2000). It's fun to show them a graph of the ASX200 or Perth median prices for the last couple of years.
Alex

 

[steveadl]

Exactly. Which is why I love listening to all the people who say "why would you invest in Adelaide?" Sydney is the best, Brisbane is booming etc etc

Can't wait to show them Adelaide price graph in 5yrs and hear them say "wow, you were lucky!"

 

[Harris]

Exactly. Which is why I love listening to all the people who say "why would you invest in Adelaide?" Sydney is the best, Brisbane is booming etc etc

Can't wait to show them Adelaide price graph in 5yrs and hear them say "wow, you were lucky!"

Whilst I would agree that parts of Adelaide are looking good for investment and that it is one of the most affordable Aus city, there is no doubt that the ANZ report does point to a worrying trend there.

I am sure ANZ isnt biased towards SA and the slowing economy combined with attrition of people from SA to other states, if ongoing would take the heat out of the property market.

I would hence be careful before making statements like the one you have made above - The graph might not look that great off the back of receding economic activity. Hope that SA is able to reverse the trend.

Harris