Web Specials

Housing construction and 7 reasons to buy now

Housing construction a good start-up opportunity

Housing construction has been identified as one of five industries offering the best start-up opportunities for 2011.

According to IBSWorld, the house construction industry has been on a roller coaster of highs and lows, but conditions are projected to strengthen considerably over the next few years as the housing investment cycle enters its next growth phase.

While many property experts believe building will be slow in 2011, IBISWorld reports that the value of new housing construction is projected to surge by 10.4 per cent in 2011-12 and the number of housing commencements should grow by about 12 per cent to 169,000 units, driven by demand for accommodation from first homebuyers and strong growth in the resident population.

IBISWorld general manager Robert Bryant says while interest rates are expected to continue the upwards trend, it won't significantly dampen the recovery in housing commencements.

"Existing operators will have the advantage of access to a pool of skilled subcontractors, ongoing arrangements with material suppliers and ongoing arrangements with financial institutions and property developers," he says.

"Due to relatively low set up costs, IBISWorld expects more than 1000 new start-ups to establish themselves in this sector."

The other four top start-up industries identified by IBISWorld are accounting, landscaping, plumbing and takeaway food retailing.

7 reasons to buy an investment property now

It's an investors' market out there and "this is a fantastic time to buy an investment property", according to the Reno Kings. They cite seven reasons why that's the case:

It's a buyers' market - most buyers don't buy in a buyers' market; investors buy in a buyers' market, so we should call it an investors' market. So what should investors do? Get out there and buy.
Prices for some materials are dropping so now is the best time to do some renovations or building.
There's the emergence of a major commodity demand coming out of China and India. The Reserve Bank is forecasting a resources boom, so investors need to get ready for that.
There's going to be an influx of workers, who will need somewhere to live and they'll most likely be renting properties.
A rental boom is just around the corner - as those workers come in there'll be increased demand for property and with a shortage of houses already rents are sure to increase.
Other markets - such as the sharemarket - are volatile but property is stable.
Growth in prices is coming - the cycle will soon turn. There'll be a rental boom and a shortage of housing will drive up prices. Investors should be getting ready for the next capital gain boom. Don't miss the boat.