Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Saturday, 11 June 2016

Arrium collapse

Not pretty.

With the future of Whyalla's steelworks remaining up in the air, the property market appears to be at risk of imploding.

With vacancy rates above 20 per cent and rising, median asking rents appear to be dropping at a quite alarming pace. 

Asking rents down by about 30 to 50 per cent over the last three years, with the pace of the decline having accelerated over the past year, and more so over the last quarter.

Source: SQM Research

This can be a pervasive risk for towns that are so heavily reliant upon one or two industries or firms for employment and for the local economy to thrive. 

The administrator's call for government assistance to support the Arrium steelworks was rejected by Prime Minister Turnbull.

The Labor state government has pledged support in the form of a $50 million funding facility for the prospective new owner of Arrium - were such a deal to be found.