The mining boom is officially over, according to resources minister Martin Ferguson despite claims from the Minerals Council that the scene is ‘just different’.
Mr Ferguson told ABC radio this morning that he believes Australia’s resource boom is finished.
“You've got to understand, the resources boom is over.
“We've done well $270 billion in investment, the envy of the world. It has got tougher in the last six to 12 months.”
The announcement comes after the world’s largest mining company, BHP Billiton, pulled the plug on a $30Bn expansion plan for its Olympic Dam mine site.
House prices in the local town of Roxby Downs have skyrocketed since the mines approval in October last year, with annual growth exceeding 25 per cent according to Australian Property Monitors.
Speaking with Smart Property Investment, founder of wHereGroup and property investor Todd Hunter said the announcement is bad news for high risk investors.
“Big corrections will hit Whyalla, and even Adelaide to a certain extent. Not a drastic change in Adelaide, but with 8,000 less FIFO workers there will be an impact.
“Roxby Downs has always been a very high-risk investment, I wouldn’t say median prices and rents will plummet but they will definitely come back down,” he said.
Mr Hunter also said that positive sentiment was being kept afloat by the resources boom, however with politicians claiming it is over, sentiment will surely slump.
“There will be a big correction in house values, but it’s not only that. Over the past few weeks things have turned sour.
“You hear reports about China’s growth in decline for the first time in 30 years and not only Olympic Dam, but BHP is not going to approve a $20Bn expansion in Port Hedland.”
However, according to the Minerals Council of Australia chief executive Mitch Hooke, the boom is not over.
“it's just different… The developing world transformation continues to deliver sustained demand growth, but capturing this means growing volumes the free kick from higher prices is over,” Mr Hooke said.