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WA Credit Rating Downgraded Again - Moody's
Topic Started: 25 Aug 2014, 04:29 PM (5,444 Views)
SittingOnDeFence
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Blondie girl
26 Aug 2014, 12:43 AM
I believe BP once mentioned he has an ip in Highgate, that's seriously not a shitty area zappy.

Really?
Does Skamy get you that excited ?

:lol
Highgate is an area of Perth that has lots of high density inner city stuff going on, its very close proximity to the city centre.
No but she makes me anxious
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zaph
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Blondie girl
26 Aug 2014, 12:43 AM
I believe BP once mentioned he has an ip in Highgate, that's seriously not a shitty area zappy.

Really?
Does Skamy get you that excited ?

:lol
Did he?

I've never seen him mention anything in his current skin. He mentioned lots in his former handles.
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Blondie girl
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zaph
26 Aug 2014, 01:02 AM
Did he?

I've never seen him mention anything in his current skin. He mentioned lots in his former handles.
Well black Puddy will need to clarify that then won't he?

You better get a nice picture of a big bummed rio de janeiro girl posted, I'm sure he'll respond.
Skamy
You've been scaring 1 poster lately, you better whisper nice things to him soon..
Edited by Blondie girl, 26 Aug 2014, 01:10 AM.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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skamy
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SittingOnDeFence
26 Aug 2014, 12:59 AM
No but she makes me anxious
What are you anxious for? Truth is that this is just another beat up, Perth and WA will be just fine. Read my thread for all the good fundamentals. Going into debt for infrastructure won't crash the market in fact it may boost the property market. All that new added value and lots of jobs.

This is just yet another round of the WA bears ooohing and ahhing the fact that they found a bit of bad news.

So what are those guys thinking this time 20% down or 40% how about y'all get real excited and jump for 50% you have not done that before.

WA has the same rating as the UK and France are they both going down too.

Don't you guys ever ever get sick of waiting on this ridiculously unlikely property crash that you predict for one of the richest states in one of the richest countries in the world. Every few days for the past two years this same group of people get together on a thread and claim the crash is coming, the crash is almost here, this time it is really coming etc etc. A few days later off they go again, they never get it right because they fail to understand the very real stress that needs to be out there before bad news can crash the market.

The problem here is simply that WA needs to spend on infrastructure and it loses too much GST so has taken on debt (most people are aware of the intense lobbying of the WA government on this issue).

Iron ore royalties are not so much predicted to be poor, they are predicted to be more volatile.

Whatever it is not a big issue, it will not lead to higher interest rates as it was already factored in. This rating will have absolutely zippo effect except to lend some help to the State government when they lobby for GST changes.


Blondie girl
26 Aug 2014, 01:07 AM
Skamy
You've been scaring 1 poster lately, you better whisper nice things to him soon..
:lol
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Mike
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Veritas
25 Aug 2014, 10:35 PM
Levered up investors are rushing for the door already.

The boom is over.

People are leaving.

The tide is going out and thousands of WA property speculators are swimming without shorts.
That is really beneath you Veritas, I expect that from Perthite.

Do you have any data to show investors are rushing out the door?

Do you have any data showing population is in decline in WA?

Do you have data showing investors are swimming naked?

Because data from the ABS says the complete opposite to you. Population growth is still close to 3% which is more then double the national average and considered extremely fast by any measure.

Investors continue to make up roughly a 1/3 to 1/4 of all new loans in WA, which is about the same as it as always been.

Can you show some data to support your claims. Or are you just making blatant false claims.
Veritas
25 Aug 2014, 10:35 PM
If by strong you mean falling, then yes they are very strong.

In fact, rents are now falling in Perth for the first time in over ten years.

Levered up investors are rushing for the door already.

The boom is over.

People are leaving.

The tide is going out and thousands of WA property speculators are swimming without shorts.
Just to make you look like a fool which you did all by yourself.

Housing finance commitments up 1.8% in June, up 2.2% over the 3 months. This is why we are seeing increased sales over the last month or two. It is why stock is declining for both rentals and housing stock, more sales.

http://www.treasury.wa.gov.au/cms/uploadedFiles/_Treasury/Economic_Data/housing_finance_june2014.pdf

Now even though Jimbo claimed more First Home Buyers are now building then buying established homes, the data just in July proves I was right and he was wrong. In July 1,141 established properties were sold to FHB, while 707 decided to build a new home. The huge changes made to the FHBG that Jimbo talked about, actually raved about increased FHB house construction by exactly 50 properties over Junes levels, ohh no. Mean while despite these changes established house sales to FHB increased by 141 from June to July, almost 300% more then the increase in FHB opting to build.

Appears my observations and net work of information is far more accurate then Jimbos.

http://www.treasury.wa.gov.au/cms/TwoColumns_Content.aspx?pageid=13730&id=641

Meanwhile the FHB data does show is demand for properties from FHB has skyrocketed to be almost 350 more houses sold to FHB now then in January of 2014.

There is no official data showing the population is declining like you claim. The latest data from the ABS shows Perth growing at close to 3% http://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0

If the population was slowing, why are so many new loans being created, why are so many FHB buying/building houses. Surely if the population was declining we would see this turn negative not showing even more growth above the boom levels we have just enjoyed. Surely this would not happen.

Try backing up your claims with data.

Nothing I see out there in the real supports your wild claims, the data also supports my claims.

Prove otherwise.
Edited by Mike, 26 Aug 2014, 02:34 AM.
http://mike-globaleconomy.blogspot.com.au/
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Lef-tee
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This was not unexpected. WA has been riding high on the biggest mining investment boom in all of history....but all booms end sooner or later.

In 2000, mining capex was around 6%-7% of WA state final demand - not massive but certainly not trivial either. But at the peak - which we now appear to be past - it reached almost a third of state final demand. That is a pretty eye-popping proportion for a single, temporary spending flow to make up.

New home building and other spending have some pretty big shoes to fill.
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John Frum
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Mike
26 Aug 2014, 02:11 AM
Another economic brain fart from Mike your local friendly neighborhood property spruiker
You fools just don't get it, do you?

Sure, bring more migrants to Perth. Bring some clever ones to design bridges, some hardworking ones to build them. The problem is though that they'll be going nowhere.

Population growth and infrastructure spend won't magically fill WA's coffers up over the medium term. Its was China's fleeting demand for the magic dirt to help fuel their own unprecedented urbanisation project that did that. And that's now coming off the boil.

What you could have done was to have anticipated this moment earlier on and invest some of the spoils of the boom into value-add manufacturing - you know, like training people to do something clever with the dirt rather than dumping it straight into a container and hauling it over the sea.

Instead you spunked it all on big cars, jetskis, whores, and, crucially, bidding up house prices and taking on debt to levels only sustainable if you extrapolate a mining boom to infinity.

Don't think migrants won't up sticks and leave if the prospects for work are poor. There are plenty of nicer places to work for an average salary.
Edited by John Frum, 26 Aug 2014, 07:52 AM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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goldbug
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You bulls have been crapping on about how great property in perth is for 7 years now but have you looked at the price chart over that time? It's a roller coaster that has gone where. No capital gains to speak of and in a Ponzi scheme like Australian property has become those gains are all that matter. By the time your properties are paid off the rental yeild you will finally be able to pocket will be puny compared to the cost of living.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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CrossPost
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From Moodys:
Quote:
 
The ratings downgrade reflects the state’s ongoing deficit position, the deterioration in its debt metrics, and a growing risk that this trend may not be reversed soon. The challenges related to narrowing the budget gaps include greater volatility in the state’s revenue base, reflecting its increasing reliance on royalty income, expenditure pressures related to the rapid expansion in the state’s economy and population, and a weak policy response to the deteriorating financial and debt position.

These trends have led to persistent deficit results with the general government sector’s budget gaps averaging 5.0% of revenues from FY2008/09 through FY2012/13 and, in FY2013/14, the deficit is estimated to be equal to 6.2% of revenues as current expenditures continue to outpace revenues.

The state’s fiscal action plan — implemented in FY2013/14 to reduce its budget gap — including an increase in tax rates and a new wage policy that limits salary increases to inflation, are positive steps but are not expected to lead to significant improvements in the near term. Minimal improvement is expected in the financial performance in FY2014/15, with the gap budgeted to be AUD1.6 billion or equal to 5.7% of revenues, as revenues are forecast to ease in line with slower economic growth.

The state plans to narrow its deficits to 2.5% of revenues on average over the next four years and a low 1.1% in FY2017/18. But improved results will be challenged by an increasing reliance on more volatile mining royalties, which is forecast to amount to nearly one-quarter of revenues by FY2017/18, up from around 8% in FY2006/07. The state’s assumption on royalties is underpinned by a fairly optimistic forecast for iron ore prices.

In addition, the state will be hard pressed to meet its very low spending growth targets, unless the government’s fiscal resolve strengthens and new measures are identified. Projections rely on reducing the average rate of spending to 3.5% compared to 7.1% over the last four years, which incorporates much slower growth in employee costs and a steady reduction in the growth rates of healthcare and other social services. Moody’s notes, however, that flexibility is enhanced by the still high levels of capital expenditures, which the state plans to reduce as current works on large projects — in particular significant investments in new hospitals — are completed.

Western Australia’s debt burden has risen sharply in recent years as the consolidated sector incurred larger cash deficits. Net direct and indirect debt rose to a high 96.5% of revenues in FY2012/13, from a moderate 44.4% in FY2007/08, which is manageable but higher than most other Australian states. Over the medium term, projected cumulative cash deficits could push the debt burden up to 107.0% of revenues by FY2017/18. The state’s debt structure is quite short-dated, with average maturities at three years and short-term and floating-rate debt amounting to more than 50% of total debt in recent years. However, the state is making efforts to lengthen the maturity profile of its debt.

The stable rating outlook is supported by the state’s strong economic prospects and supportive Commonwealth government grants framework. Western Australia’s economy, while easing as mining investment comes off record highs, is still expected to outpace other Australian states, and remain supportive of financial and debt operations. While Commonwealth equalization grants will decline in line with the state’s above average revenue-raising ability, the system remains supportive through special purpose grants, and if economic performance weakens in relation to the other states, equalization grants also would provide a stabilizing effect and rise accordingly.

What Could Change the Rating — Up/Down

The lack of a strengthening in government resolve to slow the pace of expenditures without offsetting improved revenue trends — resulting in wider deficits and continued debt accumulation — could lead to downward pressure on the ratings. A more effective budgetary redress plan that allows the state to return to a surplus position and an associated easingin the debt burden could lead to a rating upgrade.
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Jimbo
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Mike
26 Aug 2014, 02:11 AM
Now even though Jimbo claimed more First Home Buyers are now building then buying established homes, the data just in July proves I was right and he was wrong.
Appears my observations and net work of information is far more accurate then Jimbos.
Actually Mike, I said that FHB's were favouring new build over established due to recent policy changes. I didn't say more FHB's bought new than established. The article that this thread is based upon, states the following.

"The number of applications for first home owner grants to build new homes jumped from 673 in May to more than 1050 last month." and "Mr Gelavis attributed some of the heightened interest to changes to the grants scheme last September."

Also Mike, why are you quoting December 2013 figures to claim that population in WA is increasing at 3% pa now?

Applications for the 457 class visas to WA are down 41% this year. The 457 is the easiest and quickest way for a migrant to get to Australia and is a good real time indicator of migration patterns and employer demand. It is also the largest visa subclass that allows the applicant to take up full time permanent work. Therefore, it is likely that other visa subclass and interstate migration will also be down.

https://www.immi.gov.au/media/statistics/pdf/457-quarterly-report-2014-06-30.pdf

Meanwhile, you are using 9 months old ABS data which I find strange considering you have a network of people pulling in information for you?

Perth is building 30% more new homes than it was a couple of years ago. Tradies are rushed off their feet. Many of those new homes are being built for people who currently live in rentals and there are not enough new people arriving to fill the vacuum they are leaving when they quit their rental and move into their new homes.

My own data shows that southern suburbs rental vacancy rates are up by 15.2% since July 12th.






skamy
26 Aug 2014, 02:06 AM
WA has the same rating as the UK and France are they both going down too.

Well, France is sliding back into recession to start with.

You could argue that the UK is doing OK but I would argue that it is totally stuffed, in a corner and with no way out.
Edited by Jimbo, 26 Aug 2014, 09:48 AM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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