Australia's mining boom has ended and been replaced by a housing construction boom, according to a report released by the Commonwealth Bank.
That said, mineral-rich Western Australia continues to be Australia’s best-performing economy and the strongest in housing finance. It is also second in economic growth and third on housing starts, according to the report.
Murray Brede from Perth firm Loans Café said it was not so much the mining boom that had ended but the construction phase of the mining boom.
“And that’s where a lot of people have left. So the vacancy rates in Perth are a bit higher now,” he told Residential Property Manager's sister title, The Adviser.
Mr Brede said rental prices had also fallen in the metropolitan areas of Perth. “So in some cases the mortgage holder might have lost about 20-30 per cent of their rent,” he said.
Future success in new housing in Western Australia would depend on how negative gearing was treated in the May 8 state Budget.
“It’s a really critical thing,” he said. “If they say you can only negatively gear on new property, that’s going to really help new housing, and perhaps stifle existing housing.
“So investors, I think, are holding off a bit now ... there might be a real change in the landscape next week.”
The report by the Commonwealth Bank placed NSW first in new housing construction, with Sydney coming out as the highest performing citiy, followed by Melbourne, Vic.