It may have passed you by, but not so long ago Britain and France made a rather big announcement. By 2040, both countries plan to ban the sale of petrol and diesel-powered cars.
Great news for the environment, but you could be forgiven for asking what that’s got to do with your plans to buy a house. Well, look at it the right way, and you’ll see everything is connected…
By phasing out fossil-fuelled vehicles, more of a focus will be placed on electric cars in those two countries (and others, should the rest of the world follow their lead). Electric cars run on batteries, obviously, and a key component of most batteries today is lithium.
And guess what Western Australia has in abundance?
At the moment, a third of the world’s lithium supply comes from WA’s Greenbushes mine, which is mostly owned by Chinese company Tianqi. Now Tianqi has been looking ahead to predict how much lithium is going to be in demand, and for the last year has been gearing up towards $2 billion worth of new projects in the lithium mining industry. Around $320m of that investment will double the size of the Greenbushes mine, while another $400m will be dedicated to increasing lithium processing in the state. That’s a lot more mining and a lot more construction, which needs a lot more workers – right now, about 1000 people in Western Australia work in lithium mining, but estimates are that these new projects could double or even triple that number.
That situation mirrors what happened with WA’s mining boom a few years ago. Between 2003 and 2013, the number of people employed in mining jumped 128 per cent, bringing in huge numbers of workers from interstate and abroad. As a result, the economy got a huge shot on the arm – enough, many people think, to explain why Australia was one of the few countries to dodge the recession bullet. Wages rose, meaning people could afford to borrow more, meaning housing prices were driven up – in fact, they more than doubled between 2003 and 2006 alone (Sydney managed a little more than 30 per cent, by comparison).
You can see where we’re going here now, right?
The prospect of a higher demand for lithium around the world could well mean a knock-on increase in property values here. And that could mean that now is as good a time as any to buy and beat the rise, because if the next housing boom is coming, it could well be battery-powered.