We’ve all heard the claims that construction, home loans and real estate in Australia are some of the biggest drivers of our economic recovery, but how true is this? According to recent research commissioned by the Property Council of Australia, more than you may have previously thought.
The report, titled Economic Significance of the Property Industry to the Australian Economy, reveals that the industry is the largest single contributor to the economy, producing around one ninth of GDP. In fact, the report suggests that one in four Australians derive a wage from property or related activity – that’s an incredible stat!
“Our economy needs the property industry to do well, particularly as we transition from the mining investment boom,” said Ken Morrison, chief executive of the Property Council in a 2 June statement.
Of course statistics and statements by industry bodies can seem far-fetched without real-world proof to back it up. If the supply of jobs and economic output isn’t enough, the brick and mortar realisation of the property industry is – well – bricks and mortar.
House construction increased over the March quarter, according to Master Builders Australia. In a vote of confidence in the sector, Wilhelm Harnisch, CEO of Master Builders Australia made a statement about the continued success of the industry when it comes to producing housing stock.
“A solid lift in housing construction of 4.8 per cent seasonally adjusted is driven by building approvals and strong finance commitments flowing through to the construction phase and this will continue for months to come,” he said on 27 May.
Renovation work is also increasing, lifting the profile of existing homes all over the country. Mr Harnisch stated that the 4.3 per cent rise in renovations activity would elevate confidence amongst builders.
It’s not all good news, unfortunately. The report from the Property Council of Australia shows that newly built houses for sale have been taxed more than twice the OECD average. Not all of these levies are placed directly on land or buildings, but come in many guises from federal, state and local authorities. However, they do all add up to more expensive housing at the end of the day.
“We know that governments at all levels are looking for ways to secure strong and consistent economic growth. This report confirms that they should be focused squarely on property as the industry that can deliver this for them,” concluded Mr Morrison.