Pete Wargent blogspot
Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.
4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.
"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.
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Wednesday, 15 February 2017
Commercial lending falling in WA
The recovery in commercial finance commitments has largely been driven by New South Wales and Victoria through this easing cycle.
Looking in more detail at the figures for Western Australia and the challenge for the resources states becomes clearer.
One of the key problems is simply that the economy is so pro-cyclical.
When resources construction was booming in WA, so too were dwelling construction, home-buying, and property investor loans.
In fact, through to 2014 demand for everything seemed to be exceptionally high as the state population swelled at pace.
Unfortunately, all of these sectors are now in decline together, and this will likely remain the case through 2017.
The figures for engineering construction activity are already rising again in the eastern states, but it looks as though the downturn has another year or so to run out west, and possibly in the Northern Territory.
As the economy in WA has slowed, some workers have opted to move (or return home) interstate.
A few property price indicators and indexes have recorded moderate gains for Perth in recent months.
However, with vacancy rates as high as they are, it still doesn't feel much as though the bottom is in.
Similarly, the economy isn't showing too many vital signs either just yet.
Probably the turning point for dwelling prices will come when it becomes cheaper for new market entrants to buy than it is for them to rent.