A couple of tips Doc. Cross posting is generally frowned upon in every forum I've ever participated in.

If you want to quote someone you can use the quote tags .. see following

[*quote=Freckle]…[/quote] (remove the * from the first tag to activate) which looks like

If the reference is another page or thread you can refer to it by going to the post, right clicking the post number in the side column and selecting "Copy Link Address" and pasting into your reply like this. The following link is to your post above

https://www.propertyinvesting.com/comment/284618#comment-284618

or you can embed the link into a key word by highlighting the word then selecting the link icon in the comment box menu bar above and pasting the link into the appropriate block eg; your post

So I recommend you edit the above thread and paste the first half into the appropriate thread so we can all stay on the same page. I'll address your comments there.

So lets see if a rental market moves 3% points in a little over 6 months that's quite reasonable in your opinion.

Not yet but if this rate hits 10% you'll have a problem.

Lived there for 5 years until mid 2012 and was back there in Nov Dec for JDN demob. I have 2 sons that work there and the wife FIFO's in and out of the place on a casual basis. In all that time vacancy rates never changed. If anything they got tighter. I know no one who would even consider giving up a rental just to leave for a few months. They were simply too hard to reacquire. My busiest months where the summer months so this slow down theory is a mystery to me.

50+   .. where do you get this from? I can't recall PH ever getting to 50+. The record for PH is 49 in Jan 2008. The wet season it usually sits around 42 and then only after Xmas

Contractors rarely get the choice when to start a contract. The primary factor that affected contractors was accommodation availability.. simple. The fact is you cannot preplan contracts around what the weather may or may not do. The last 2 seasons average summer temps have been sub 40.

BHP and FMG and all the other producers have one priority.. production. When productions at risk BHP will spend any amount of money to maintain it. Rental costs are a rounding error to BHP

BHP laid off contractors because the price crashed. They all got a big wakeup call with regard to their assumptions on China and global demand. JDN moved on because the Outer harbor project was canned. They still have a laydown yard at Redbank and may be back this year for an FMG contract. JDN's work force is tiny compared to overall numbers. The bulk of their guys are fitter welders. Gravity do all their rigging and crane work. JDN were always a headache to work with but they were only shown the door because they were no longer needed.

Contractors left town over this period because the slow down is happening faster than most thought possible. Major infrastructure projects will complete over the next 12 – 15 months and there's absolutely nothing following behind them. We're into March now and the place is dead quite according to my sources.

If your summer season fluctuations theory had any merit you'd see vacancy rates shrinking back but they're still climbing.

Agh???  High density high rise was kicked off in 2011 .. Pretty Pool ring a bell?. The planning for that was set in motion a few years beforehand. The Esplanade Hotel expansion and the new low rise cnr Edgar and Anderson??

So now the balancing act becomes can you keep it rented for long enough for high enough rents to offset costs, rental challenges that are likely to be even more onerous in 2014 if this trend continues and of course there's a CG issue hanging in the air. I recall house sitting for a friend back in 07/08. A near new 4,2,1 (in Sth) that he was renting then for $700/wk. He was moaning then that they were about to put his rent up to $800

And rents have dropped around 25% already you say. I wonder where the market will be in another 6 months. Perhaps another 25% drop is on the cards as more investors scramble to acquire what few renters remain. With 160+ vacancies and growing rentals could become a bloodbath.

The Inner Harbor is BHP's baby. You also have the wind down over the next 12 – 15 months of FMG's projects. The big gas projects are highly unlikely to get off the ground in their present form if at all and the smaller projects are unlikely to have any real affect on PH especially from an accommodation stand point. From where I stand I can't see vacancy rates declining at all. In fact I see rates climbing for the next 18-24 months. 

It's alright folks.. nothing see here move along… 

Most I think understand how important China's resource imports are to AU. Most don't realise that AU imports mainly consist of resources (majority), tourism and education. In 20 years this dynamic has barely changed. If anything we've only managed to add tourism (by default) and education (again by default).

Few are probably aware of how precarious China's position is.

http://www.zerohedge.com/news/2013-03-09/chinas-economy-weakest-start-2009

For what it’s worth, there has been plenty of open criticism of the GDP at-all-costs model and some frank recognition of the scale of the malinvestment already in place. For example, NDRC chairman Zhang Ping candidly admitted that ‘a rising number’ of heavy industries were making losses and ‘lamented’ the overcapacity in steel, aluminium, cement, glass making and coking coal.

Plants in these sectors, he said, were running at just 70-75% of capacity, while the once booming solar industry was at just 60%. To address their ‘huge difficulties’, Zhang said he was pushing to increase the pace of mergers in these sectors, but also confessed that such an approach has had ‘little success’ in recent years.

The financial flip side to this was made plain by Li Yining, professor at Beijing University, who warned a CPPCC press conference of nothing less than ‘a possible financial collapse caused by overinvestment amid the country’s new urbanization wave.’ ? you know, the same ’wave’ on which all the CCP’s hopes are being pinned for the coming years?

In the midst of this, we were treated to the release of the Chinese trade numbers for February which, for reasons of LNY calendar variability, are best combined with those for January when we attempt to gauge the state of play. Intriguingly, imports— not the least imports for number of key commodities, such as copper, iron ore, and oil—were relatively subdued and hence, in keeping with anemic showing of neighboring Korea and Taiwan. But, despite this, exports took a major jump, rising by almost a quarter on the same two months of 2012.

How did that happen? Has China suddenly and dramatically reduced the contribution of foreign inputs to its output? Was this a staggered liquidation of product built up in QIV’s hot-housed burst of activity? Or was it perhaps an exercise in good, old fashioned, tax and subsidy arbitrage and/or chicanery aimed at evading the current account restrictions?

We ask this because, although they, too, rose in absolute terms, exports bound for the United States—after all, the fastest growing of all the large, net-deficit  economies—fell to a modern-era record low share while those to Hong Kong soared 60% to a new outright and relative share high. At the same time, the country saw record foreign exchange inflows of more than $100 billion— a marked contrast to last year’s hefty drain of hot money. Not coincidentally, this was a period in which the traditional speculative vehicles, the markets for stock and property, both, were on a violent upward tear.

Were exports—possibly over invoiced—again being used to wash funds through the somewhat porous capital account barrier, picking up tax rebates, with notional ownership about to change to something ostensibly foreign?owned and based in a foreign tax haven when and if they are subsequently re?imported in the coming months?

Was this a means to exploit the yen’s twice-in-a-lifetime rate of decline by clandestinely borrowing some of that excess valuation in Abe-san’s fast depreciating currency?

We have no way of knowing, of course, but we remain duly suspicious.

For over two years now I've been saying the Chinese gravy train is on a one way trip off a cliff and that our growing dependency would be a disaster in the making. I've never believed the 8%GDP growth story and less in the last two years.

Jun last year I made the comment "Did China just crash?", when for no apparent reason electricity production just plummeted. It was a lone outlyer that suggested production had simply crashed. Later it was shown that inventories where going through the roof, China was producing but orders had been slowing for months.

I've always believed growth was closer to a 3-5% range than the hyped and manufactured figures we see pumped throughout the MSM. 

China still has considerably more capacity for malinvestment. The question is will it continue or will the new leadership reign it in and if yes how much and how fast? Whatever way they choose we have little choice but to bite the bullet. We can only hope its a slow orderly correction that enables our economy to adjust progressively. My gut tells me they'll run for a while yet. This isn't going to get fixed in 5 minutes that's for sure.

WA will face some challenges come 2014 as resource investment literally drops off a cliff.

• On the basis of past engineering construction

  commencements, there are reasons to believe that

  there is a risk of a decline in 2014 big enough to take

  2% points off GDP growth in that year unless another

  “mega” project starts soon.

Implications

What is interesting about this analysis is the potential for mining

investment to decline precipitously once existing projects have

been completed. This “mining cliff” could appear as early as the

first quarter of 2014. The commencement of new mega projects

could delay the cliff for 18 months or longer. On the other hand, a

decline in commencements in response to declining commodity

prices and rising costs is unlikely to affect mining investment until

well into 2015 in view of the typical gestation period for projects.

Any sharp decline in mining investment in 2014 would be highly

detrimental to growth without an offset. Some of that will come

from increased mining exports as new projects continue to come

on stream. However, employment is likely to struggle unless  

non-mining investment fills the breach.

Comment from MB (HnH)

There are only two mega-projects left on the books, Browse and Arrow LNG. Shell has already said it is delaying both. I believe Browse is still a chance to go ahead but not as a terrestrial project. The Browse partners clearly want to use floating LNG, which will actually mean an investment in Korea not Australia (because it supplies the floating behemoth that does the mining). Arrow is less likely again.