New research commissioned by the Property Council of Australia has found that the property sector accounted for 11.5 percent of GDP in the last financial year, becoming the largest industry in the Australian economy above the mining and financial service sectors.
The industry now makes up nearly 30 percent of the economy, with a share of the GDP worth $182.5 billion in 2013-14. It is Australia’s second largest employer, directly creating 1.1 million jobs or 2.7 million full-time positions when flow-on positions are included, which is more than mining and manufacturing combined.
The report also found that the property industry pays more than double the tax of the OECD average, with $72.1 billion paid in federal, state and local government rates, fees and charges. New South Wales contributed the highest amount of tax in 2013-14, with $23 billion paid by the industry. Ken Morrison, Chief Executive of the Property Council of Australia, said the research indicated a need to introduce measures that further expedited the sector’s growth, including tax reforms.
“If we can unlock the potential to increase property’s contribution even further, that will mean more jobs and more prosperity for Australians,” said Morrison. “Governments can help make this happen by abolishing our most distorting taxes – like stamp duty – and streamlining planning processes to make housing more affordable for all Australians.”
While it’s generally agreed that recent housing prices in capital cities aren’t sustainable and will ease over the next 12 months, this research highlights the importance of maintaining long-term housing supply pipelines over the coming years. Despite the doom and gloom depicted by Australian media, it’s clear that the property sector is thriving and continues to strengthen with the support of a strong industry and competitive environment.
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