As perfectly insane optimists and carpet-baggers point to a bottom in Perth housing, the reality ahead is much more stark, via the AFR:
The downturn in the Perth housing and construction market has claimed a high-profile victim with listed developer and builder Diploma Group collapsing owing creditors about $40 million.
The 40-year-old company, which is controlled by the Di Latte family, appointed Matthew Donnelly, David Hodgson and Andrew Hewitt of Grant Thornton as administrators on Thursday.
The appointments cover the ASX-listed Diploma Group and two of its subsidiaries, Diploma Construction (WA) and DGX Construction. Martin Jones and Andrew Smith of Ferrier Hodgson were appointed receivers on December 21.
Mr Donnelly told The Australian Financial Review Diploma Group and its subsidiaries owed about $40 million to creditors, which include sub-contractors, the Australian Tax Office, AssetInsure (owned by insurance giant Swiss Re) and a mezzanine lender.
“It would be easy to say all commercial builders in Perth have come under margin pressure and Diploma is no exception,” said Mr Donnelly.
And it is going to get worse as it combines with the last down leg in the capex cliff:
Then delivers the second round bust in dwelling construction which has barely started (see orange line):
Unless you’re a poop-throwing monkey in the WA Treasury that sees 1.5% growth in dwelling investment across 2017/18 just as population growth collapses.
