No. 3 - Department of Treasury - The Western Australian Government

More documents

Recommendations

Info

Western Australian Economic Summary2006 No.3Figure 7REIA HOME LOAN AFFORDABILITY INDICATORMedian Family Income to Average Loan Repayments706050403020100Sep-81 Sep-86 Sep-91 Sep-96 Sep-01 Sep-06Western AustraliaAustraliaSource: REIADeclining housing affordability is also likely to affect demand and hencegrowth in house prices. According to the REIA housing affordability index,housing affordability in Western Australia is close to historical lows. Theratio of median family income to the average loan repayments forWestern Australia declined by 4.9% in the September quarter 2006, to be16.6% lower than in the September quarter 2005 (Figure 7).Strong growth in house prices and recent interest rate rises are affecting firsthome buyers, with Department of Treasury and Finance (DTF) dataindicating that the number of first home buyer finance commitmentsdeclined towards the end of the September quarter 2006.The median price of first homes across Western Australia nonetheless roseby around 10% to $330,000 in the September quarter, similar to the rate ofgrowth of established house prices in Perth.Consumer SpendingConsumptionWestern Australia’s real household consumption increased by 1.1% in theSeptember quarter 2006, following growth of 1.2% in the June quarter. Inannual average terms, real consumption grew by 4.2% in the year to theSeptember quarter 2006, which is similar to its long-run average growth rateof 3.4% over the last 15 years.Consumer confidence and spending have been buoyed in recent years byemployment and wages growth (especially in the resources sector), lowunemployment, rising real wages and wealth effects flowing from risingprices of equities and property.12 Department of Treasury and Finance
2006 No.3 Western Australian Economic SummarySigns of a slight deceleration in real retail turnover (adjusted for inflation)are however beginning to emerge. In the September quarter 2006, real retailturnover rose by 1.5%, down from growth rates of 2.2% and 2.5% in the Juneand March quarters respectively.The three interest rate rises in 2006 may dampen consumer spending furtherover the next few quarters.Personal income tax cuts 1 and a fall in petrol prices are aiding consumptiongrowth. Fuel prices in the Perth metropolitan area have fallen from135.6 cents a litre for unleaded petrol in May 2006 to 116.3 cents a litre inOctober 2006 2 . ABS data for the year ended 31 October 2005 show theaverage distance travelled by a passenger vehicle in Western Australia at13 800km, consuming 11.3L of petrol for every 100km travelled 3 . Using thisdata, the fall in the price of unleaded petrol would lead to average savings ofapproximately $23 a month for each passenger vehicle in Western Australia.Consumer ConfidenceThe Westpac-Melbourne Institute of Consumer Sentiment Index 4 fellnationally and in Western Australia, after both the August and Novemberinterest rate rises (Table 4).Table 4WESTPAC-MELBOURNE INSTITUTE INDEX OF CONSUMER SENTIMENT2006 NSW VIC QLD WA SA TAS AUSJanuary 111.8 108.9 106.3 126.3 116.4 96.6 111.8February 108.4 107.7 106.6 129.4 109.6 117.2 110.2March 105.2 112.2 116.7 126.2 117.5 114.0 111.5April 108.8 113.2 110.7 114.4 117.5 111.1 111.4May 105.1 102.1 99.4 115.8 109.3 108.2 104.3June 103.3 97.3 104.6 118.6 105.5 104.9 103.8July 107.3 103.5 104.6 129.1 103.2 106.5 107.4August 86.7 90.9 88.6 108.0 83.9 81.5 90.0September 96.5 99.1 104.5 117.6 97.6 110.2 101.2October 100.6 106.2 105.2 118.7 104.4 103.8 105.2November 93.6 92.2 97.7 110.2 85.6 100.4 95.0December 102.1 106.0 109.8 116.4 102.3 105.4 106.2Source: Westpac Melbourne Institute via Data Stream1 Source: www.budget.gov.au. $36b worth of federal tax cuts over the next four yearscame into effect on 1 July 2006.2 Source: www.fuelwatch.wa.gov.au3 Source: Survey of Motor Vehicle Use, Australia, 01 November 2004 to 31 October2005, ABS catalogue 9208.04 The index is derived by the percentage of respondents who reported that they wereoptimistic minus the percentage who believed that they are pessimistic plus 100. Forexample, if 900 of the 1200 respondents (75%) were optimistic about economicconditions over the next 12 months (a component question applied by WMI) and 300were pessimistic (25%) then the index for the component question will be 150.0.Department of Treasury and Finance 13
Page 1 and 2: Western AustralianECONOMIC SUMMARY2
Page 3: Table of ContentsOverview .........
Page 6 and 7: Western Australian Economic Summary
Page 66 and 67:
Western Australian Economic Summary
Page 68 and 69:
Page 70 and 71:
Page 72 and 73:
Page 74 and 75:
Page 76 and 77:
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
Page 90 and 91:
Page 92 and 93:
Page 94 and 95:
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
show all

No. 3 - Department of Treasury - The Western Australian Government

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?