As Australia’s resources boom subsides, other sectors of the economy will need to kick economic activity into gear – although that’s easier said than done.
With the value of the Australian dollar still high by historical standards, despite recent falls, manufacturing, tourism and international education remain under the thumb and retail isn’t doing particularly better, albeit for different reasons.
But now that interest rates are at historical lows, one sector that does seem a likely candidate for replacing the mining boom is the property market.
“The mining and commodities boom is slowing [but] the property market is ever changing, and current drivers are preluding massive growth in city areas,” says Positive Real Estate’s Sam Saggers.
Saggers says that a demographic shift is creating strong investor opportunities. The population is rising in most capital cities, but new house construction is lagging behind. This has created an intense pressure on the supply of housing that is going to increase as low interest rates buoy more buyers into the market.
This situation comes as Your Investment Property unveils a landmark report in its September issue, detailing exactly how growth in Australia’s property market is anticipated to play out and where investors can expect the bulk of activity to occur.
Titled “Brace for the Boom”, the report explains how current market conditions suggest that many areas across Australia are going to see significant growth.
CommSec research puts the market into content. “Home prices are lifting at the fastest annual rate in more than two and half years,” the researcher says. “In addition, home sales continue to lift while [recent] data showed that loans outstanding by property investors are growing at the fastest rate in three years.”