Some great charts and analysis here:
http://www.markthegraph.blogspot.com.au/2013/06/wa-is-it-in-recession.html
WA - are you ready...?
- Thread starter Aaron Sice
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Some great charts and analysis here:
http://www.markthegraph.blogspot.com.au/2013/06/wa-is-it-in-recession.html
Troy Buswell's a joke, stopped reading after I saw his name; I wish they would move him on
Whether you agree the 'mining boom' is over or not most people agree the investment boom has ended. As I have said before, this is the most labour and capital intensive - actually digging the stuff up and putting it in a boat does not generate significant jobs. The WA economy and property market has been geared round significant migration inflows from people working on investment phase projects. What happens when the investment slows or stops? They've got no job and they don't need to buy ridiculously overpriced houses and their companies won't pay ridiculously inflated rents, for example it's that old chestnut port headland, the epicentre itself:
http://www.afr.com/p/national/iron_ore_boom_town_burns_homeowners_KMU7sHtZineGs5Hn20psjK
http://www.afr.com/p/national/iron_ore_boom_town_burns_homeowners_KMU7sHtZineGs5Hn20psjK
John Briggs of Port Hedland Real Estate predicts tough times ahead. “Sales are few and far between,” he said. “Anybody who has bought in the last 18 months is in for a torrid time.”
I wonder what this hack was telling people he was selling these places to over the last 18 months?
I wonder what this hack was telling people he was selling these places to over the last 18 months?
Great time to buy, property prices will increase typical agent.
Must suck for these owners if true
http://m.afr.com/p/national/iron_ore_boom_town_burns_homeowners_KMU7sHtZineGs5Hn20psjK
http://m.afr.com/p/national/iron_ore_boom_town_burns_homeowners_KMU7sHtZineGs5Hn20psjK
"A banking source said lenders would require potential buyers to have about 50 per cent equity to buy into the former mining hot spot, rather than the 10 to 20 per cent required in stable markets."
who be this nameless banking source? I stand to be corrected, but for now I will call him a plonker. And where art thou stable market? some poverty stricken suburb of a major city with someone struggling to pay $300 a week that's been going backward in value?
So which bank has changed from 10% to 50% LVR? Or are we just having a little day dream whilst staring into our chai latte on Lygone St?
who be this nameless banking source? I stand to be corrected, but for now I will call him a plonker. And where art thou stable market? some poverty stricken suburb of a major city with someone struggling to pay $300 a week that's been going backward in value?
So which bank has changed from 10% to 50% LVR? Or are we just having a little day dream whilst staring into our chai latte on Lygone St?
no one will pay more than they have to, however $500 per room per week is cheap compared to the cost of accommodation camps
Some may be interested in this???
http://mattcowgill.wordpress.com/2013/06/11/is-wa-in-recession-slightly-wonkish-post/
http://mattcowgill.wordpress.com/2013/06/11/is-wa-in-recession-slightly-wonkish-post/
great post Marisa.
I think people that see WA investment as "peaked" are probably off with their timing......by about 12-15 years.
there are always peaks and troughs in any rising or falling period - one blip does not a trend make.
Chinese authorities have just approved an $11bil steel processing plant only capable of taking high grade ore. $11bil! in china! that's a massive plant.
admittedly, china can get it's ore from brazil too. but let's face it, Aussies are pushover with a stable political system, and closer to boot.
while I will easily admit there's a lull, only september will tell if it confidence based or fundamentals based.
until then, I think anyone calling any direction is nothing more than an alarmist.
I think people that see WA investment as "peaked" are probably off with their timing......by about 12-15 years.
there are always peaks and troughs in any rising or falling period - one blip does not a trend make.
Chinese authorities have just approved an $11bil steel processing plant only capable of taking high grade ore. $11bil! in china! that's a massive plant.
admittedly, china can get it's ore from brazil too. but let's face it, Aussies are pushover with a stable political system, and closer to boot.
while I will easily admit there's a lull, only september will tell if it confidence based or fundamentals based.
until then, I think anyone calling any direction is nothing more than an alarmist.
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Are you talking about the one in Cambodia? If so that is $11b combined with the port & rail, the plant being the lowest cost component and it's probably 5 years from completion.
On what are you basing "12-15 years until peak"?
Many of Australia's banks and investment community are projecting we have a major peak in/forming for (mining) capital expenditure, so are you saying they are all alarmists? Or was your direction specific to iron ore spot price?
Today in the Sunday Times, woe is me stories about people having to take pay cuts to keep their jobs.
Heard a rumour that Rio are going to offer another round of redundancies starting tomorrow.
People saying the boom has peaked are half right.
The construction boom has, but not the production boom.
I overheard on the cat bus ( my best source of gossip) that BHP petroleum are going to do a round of cuts. First O&G I've heard of cutting for awhile but they said it was due to new CEO.
ANZ have changed their borrowing criteria from 95% lend to 80% max lend for properties in mining towns. Plus they are now capping rental income to around 60% of actual gross income.
no, I mean the Baosteel plant on the island of Donghai.
I think a lot of the economists out there are looking at current projects on the ground, I which case yes I would agree absolutely.
but what is current is not all there was, is or will be.
Fe spot hasn't peaked by a long shot.
But that's the point - the construction phase is the capital intensive stage that has lead to demand for workers, significant migration and considerable wage growth. Construction also has more of a 'multipliyer' effect on the economy than digging the stuff up and sending it to China on a boat (we don't really process the stuff here).
A significant reduction in construction activity will have a big impact, particularly in WA - that's a lot of ppl who moved here on a 457 that now find themselves living in an incredibly expensive country, possibly servicing a mortgage and looking for a new job.
those in the know with the major contracting companies will tell you there is certainly a down turn coming in WA in respect of construction work (when I say construction work, I don't mean building houses I mean major projects $100m+ and certainly 'mega projects'$1bn+), there is a decent amount of major civil projects coming up in NSW, there is practically nothing happening in Victoria or Queensland from a public expenditure point of view that would 'pick up the slack' that all of these half baked economists are talking about to offset the receding private capital investment boom in WA.
What makes you think Brazil is unstable?
There are a number of other places they could source it from.
One could have said the same about Gold in January 1980 and they would have been right looking back on it now (with spot price now higher than the 1980 peak at $850). That is the logical outcome in a resource limited world with an infinite supply of fiat currency, the price of almost everything is destined to rise (eventually). So I agree, good chance it hasn't peaked, but your posts seem to indicate you think Iron Ore is heading to $180+ in the next few years?