Report Predicts that Housing Investment will Replace Mining as the Main Driver of the Western Australian Economy

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Rockingham Mortgage Broker James Eaves concurs with report and explains how the upcoming rise in housing investment will affect home buyers in the Rockingham, Kwinana, and Cockburn areas.

The Mortgage Gallery Rockingham

The market is ready to make a major move. We are starting to see it already. Interest rates are low, prices haven’t fully recovered to their previous levels, and there is a lot of pent-up demand in the housing industry right now.

Business research and forecasting firm, BIS Shrapnel, recently released a report called “Private Non-Mining Investment to Replace Government Investment as Driver of Growth.” According to BIS Shrapnel senior economist Tim Hampton, the mining investment market “should remain high, but it will stop growing. In its place we see an upswing in residential property investment from later this year.”

Hampton attributes the upcoming rise in housing investment to an old business metric: higher demand and shorter supply. The mining boom created a higher demand for workers, resulting in more immigration and a net population increase. Growth in employment and wages has resulted in a larger market of people able to purchase homes. The report also credits lower interest rates as an aid and motivator for increased housing investment.

The report also predicts an upturn in commercial property. According to Hampton, “When dwelling investment picks up, it’ll also mean more demand for accountants and lawyers.” He would go on to point out that there hasn’t been a lot of commercial property growth, and that more office space will soon be needed as a result of both the current and future economy.

James Eaves, mortgage broker at Rockingham firm The Mortgage Gallery Rockingham, is excited about the current market. According to Eaves, “The market is ready to make a major move. We are starting to see it already. Interest rates are low, prices haven’t fully recovered to their previous levels, and there is a lot of pent-up demand in the housing industry right now.”

Eaves continued, “I’ve seen it a lot over the years; markets run in cycles. Not only do they run in cycles, but they all have an impact on each other. Mining jobs increase population, which increases service-oriented businesses, which eventually drives up the demand for housing. It is typical for the housing market to lag slightly behind the rest of the economy, but it always follows employment and population, both up and down.”

When Eaves was asked what it means to the prospective home-buyer, he was emphatic: “A buyer who gets started now could save as much as a quarter-million dollars over the duration of the average home loan from what they might pay a year or two from now. Prices haven’t gone up a lot yet, and interest rates are still fairly low. The global financial crisis forced a lot of people to postpone buying a home, but they are finally starting to move forward again.”

Eaves would go on to say, “The next few months could provide a rare window of opportunity. Just as we are on a very consumer-friendly side of the cycle right now, the prices and interest rates won’t stay this low forever. While someone who buys during a boom is still making a good investment, someone who gets in just before the boom is making a great investment.”

James Eaves is a reputable mortgage broker from leading mortgage broking firm The Mortgage Gallery Rockingham. He specialises in mortgages and home loans in Kwinana, Cockburn and Rockingham areas. He works with a diverse collection of loan providers, and is an expert at finding the right financing for any home buyer, from first-time buyers all the way through retirement homes.

For more information, or to set up a consultation with James Eaves, you may contact him at 0400 204 408 or please visit his website, http://www.jameseavesmortgagebroker.com.au/

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