As investment in coal infrastructure winds down, future property hotspots may be created by the nickel industry, a leading buyer’s agent has suggested.
Demand for nickel is likely to increase over coming years as the middle class in Asia continues to expand, according to Propertyology’s Simon Pressley.
“With the existing western world and the fast-rising Asian middle class, how much extra demand will there be for cooking utensils and kitchen equipment, surgical instruments, marine equipment, the construction industry, crank-shafts and axles in cars, washing machines, aircraft engines?” he asks.
According to Mr Pressley, Australia is currently the world’s fourth largest producer of nickel.
He suggests investors place nickel-producing regions on their “watch list”.
“Western Australia (refer Kalgoorlie) has the lion’s share of nickel resources. Other less significant resources are located in the central west of New South Wales, far northern tip of Tasmania, south of Gladstone and near Townsville,” he says.
In his view, investors could benefit from buying either in remote towns adjacent to the mines or in the nearby population centres.
“Sometimes the best investment results over the longer term come from buying in the towns nearby to the mines, although an understanding of the higher volatility from commodity price fluctuations is important,” he says.
“In different situations the wisest investment might be in the large city (capital or regional) which will supply most of the goods and services to the smaller towns.”
He says Perth has the only two nickel refineries in Australia, suggesting there is "potential to increase upon its current 2,000 employees".