2-speed economy

Jack Dikian

Here in Australia we often get told that we are living in a 2-speed economy. There is no doubt that for those individuals and businesses connected to the mining and resources sector times are good.

The graph below is pretty convincing. The number of new housing loans taken out over the past 20 years in Australia looks substantially lower when Western Australia's contribution is taken out.

For resource rich states such as Western Australia and Queensland, the impact of the commodities boom has been profound. Rapid population growth rates fuelled by the boom saw Perth and Brisbane property prices soar over the past decade.

At the end of March 2011 the median house price for Perth was $480,000, compared to $300,000 in 2005 and around $250,000 in 1999.

Source: ABS, Westpac Economics