Believe it or not, the housing sector has emerged as one of the brightest spots of glory in the otherwise bleak canvas of the current economical situation in Australia. BIS Shrapnel confirmed this fact in their recent report Long Term Forecast 2014-2029, where in it was highlighted that Australian economy is currently performing at 4% growth, it is still in its weakest 4 year growth period ever since it saw its first major downfall in the early 90s. And the coming few years may be a little on the bleaker side as well.
The Rise and fallof The Mining Sector
The situation isn’t looking too promising for the future, particularly because of the saturation coming in the high level of investment that was done in the mining sector during the past few years. The booming period of resources isnow ending, and while the output and exports by the mining sector will cause uplift in the GDP, the servicing requirements as well as negative influx will definitely affect the long term economical growth in the country.
Richard Robinson of the BIS Shrapnel further elaborated this point. According to him,the main drawback that is pulling off the economic sector from its previous growth is the difficulty in transition– the transition from an economy that was majorly driven by the boom inthe constructionand mining sectorback to one that is more balanced and steady.
Australian Dollar and the Future of Economy
Richard Robinson also shed light on the pricing of the Australian dollar and its influence in the market. According to him, the valuation needs to fall to 80 cents (US) to get a pick up in the growth and benefit the economical structure inamore positive way.However, according to the experts at BIS Shrapnel, this reflux in economical horizon is still a few months away – and for the following year, it will be net export market as well as the flourishingreal estate market that is going to be the real driving force behind growth in GDP.
Recovery in the Housing Sector and Its Effects
The interest rates are currently at a moderate low, inviting more and more buyers to take the plunge and start building a winning investment portfolio. This will build the momentum in the market, as according to the report, the mortgage rates are expected to stay at low levels with only a modest few rises in the next few cycles to come. This renewed upturn in the housing market will play a major role in augmented GDP growth and balance out the void left over by the loss of jobs associated with reduced mining investment and higher dollar rate.
Are you planning on investing in real estate any time soon? Get in touch with our experts for more informationandguidance on how the property market is expected to perform inthe coming few months and what areas and local markets are in spotlight for demand and higher returns.
