Real estate crucial to Australian economy

Real-estate-is-crucial-to-the-Australian-economy_157_6013931_0_14102168_300While the headlines may be awash with residential sales figures and sky-high price increases, it also pays to think about what role the real estate sector plays in spurring and supporting economic growth across the country. If a new report from the AEC Group and the Property Council of Australia is anything to go by, real estate could not be more crucial to the nation’s well being – and there is still plenty to be done to ensure that it stays that way.

The research has revealed that the property industry is the single largest contributor to the Australian economy, with a whopping $182.5 billion share of Australia’s total gross domestic product in 2013-2014. To put this number in perspective, this surpasses the retail sector and healthcare industry combined, and significantly more than the once booming resource and mining segment.

What is more, around 1.1 million individuals hold a property-related job, making it one of the largest employers in the country, second only to healthcare. Chief Executive of the Property Council Ken Morrison said the success of the real estate sector is crucial going forward, particularly with reliance and demand for resources continues to wind down.

“We know that governments at all levels are looking for ways to secure strong and consistent economic growth,” Mr Morrison said.

“This report confirms that they should be focused squarely on property as the industry that can deliver this for them.”

Remove taxes 

However, Mr Morrison pointed out that to ensure that housing continues to rise strongly, more needs to be done on the state and federal government level. This includes removing red tape and taxes, which have been identified in the Property Council’s 2015 Development Assessment Report Card as limiting housing supply and even discouraging people from buying a house.

The report card sums up the efforts of each state and territory towards planning reform. One of Australia’s property hotspots, New South Wales, fell short in the rankings, coming up seventh. The report underlines that the state faces a significant shortfall if the government’s doesn’t step up to the plate.

However, NSW Executive Director Glenn Byres said this study represents an important launching pad for governments to make change happen.

“The only really effective way to make housing more affordable is to build more homes, build them faster and at lower cost,” Mr Byrnes said in a June 2 release.

The Housing Industry Association (HIA) has also echoed this point, underlining that the government has already proven that it can take action so needs to do so again.

“The truth is that most of the problems having an impact on housing affordability are caused by governments and therefore governments can fix them,” HIA Chief Economist Harley Dale said in a June 3 release.

With there being so many opportunities to create a prosperous and affordable real estate market, it is up to the government to run with them.

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