Published on July 25th, 2012
Housing industry tipped to boom
The housing industry may benefit from a reduction in mining and resources spending, according to one expert.
Tim Hampton, a senior economist with BIS Shrapnel, said that investment in this industry was needed to support the national economy.
"Mining investment will soon stop growing," he said. "It should remain high but it will stop growing. In its place we see an upswing in residential property investment from later this year."
His comments come on the back of a recent report suggesting that profits from the resources boom are based on decisions that were made some time ago, with fewer new projects being announced in many of the country's mining hotspots.
Mr Hampton's comments also come on the back of a recent study by BIS Shrapnel, which was released earlier this week (July 24).
In the report, it was found that there is a 25 per cent chance of a decrease in commodity prices. The research findings echo a similar study by Deloitte Access Economics which forecast a two-year end date for the mining boom.
News that the housing industry will quickly become the nation's engine room is travelling quickly, with investors across the country's capital cities keen to see improvements in housing affordability and sales figures.
Among New South Wales residents, where demand for housing is at its highest, the possibility of increased investment in this area is being met with welcome relief.
"Particularly in NSW, we've gone for so long without building houses that the vacancy rates are so low the rents are starting to move aggressively," Mr Hampton explained.
Moving work back to the capital cities will also have flow on effect for other industries, with BIS Shrapnel tipping demand for accountants, lawyers and commercial property experts to rise.