Pete Wargent blogspot

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

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Monday, 9 January 2017

Massive retail expansion for WA

The residential construction boom looks to be on its last legs, so we should be watching the non-residential approvals figures to whether there is any looming activity to pick up the slack. 

The recent multi-billion-dollar spike in September related to Packer's multi-billion-dollar casino and hotel development at Barangaroo in Sydney. 

Both Sydney and Melbourne have seen strong increases in the inevitably 'lumpy' non-residential approvals figures. 

Drilling into the sectoral figures Western Australia is no longer approving factories as it was at the peak of the mining boom.

However, there has been some solid counter-cyclical approvals activity in the public sector in health, education, and office buildings (although health expenditure appears to be curiously pro-cyclical in these figures, in fact there were some big ticket private sector items during the peak of the mining boom).

Billions of dollars in approvals are also set to be been passed for retail expansion in Perth and WA, including at Mandurah Forum, Westfield Whitford City, Karrinyup, Westfield Innaloo, Westfield Garden City, Westfield Carousel, and Westfield Galleria. 

Vacancy rates are high in Perth, and dwelling prices can be expected to decline into a fourth calendar year in 2017. 

That said, declines in Perth's median prices have only been steady and moderate, with the official ABS figures showing its price index down by 7.4 per cent over the last ten quarters. 

Always hard to pick the bottom, but based on enquiries and general scuttlebutt, I'd presently plump for 2018.