MANDURAH is being used as an example of an economic “traffic accident” in a YouTube interview The Economic Massacre of Mandurah.
The video by In the Interests of the People has had 12, 850 views since it was uploaded yesterday.
The commentators warn Mandurah’s economic woes could be replicated across the country.
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READ NOWEconomist John Adams said Mandurah had gone through a lot of turmoil.
He said property prices and rents had dropped by 30 per cent.
“This particular city has been hit hard,” he said.
“We saw an enormous amount of for sale, for rent and for lease signs.
“If the housing market fully blows out, you’re going to see what is in Mandurah today right across the country.
“It’s not a pretty sight at all.”
Mr Adams said Mandurah had been described as ground zero for negative equity in the State.
Citizens Electoral Council of Australia director Robby Barwick said many residents with mortgages wanted to bail out, but they couldn’t due to negative equity.
“It’s all come to a perfect storm in Mandurah,” he said.
Digital Finance Analytics principal Martin North said many Mandurah residents were mortgage prisoners.
He said they were stuck on higher interest rates and could not refinance with cheaper options due to Mandurah’s high risk profile and tighter loan conditions.
While many residents hope things will turn around, Mr North said hope was not a plan.
“The economy is not going to turn around any time soon,” he said.
Mr Barwick said Mandurah was a microcosm of what could happen across the country.
“From a massive boom to when the wheels fall off,” he said.
Mr Adams said Mandurah’s relatively high incidents of drug use and crime were linked to the economic upheaval.
“There is a high level of unemployment, high levels of youth unemployment and a whole host of social problems,” he said.
“When you see massive amounts of mortgage stress, negative equity and high levels of unemployment, you can understand why there is a festering of social problems.”