Australia’s property industry is emerging as the main driver of national economic growth and increased employment levels, according to new research.
The latest annual <i>ANZ/Property Council Survey</i> shows residential construction activity is expected to remain one of the highest of all sectors over the next twelve months, with residential price growth expectations maintaining a positive outlook for 2015, easing from the peaks of mid-2014.
The property and construction industry is expected to further increase staffing levels in the year ahead, adding to its 1.3 million strong work forces.
Overall, forward work plans and staffing levels are expected to increase and are at 147 and 122 index points respectively. The research found construction activity expectations continue to increase to record high levels in the retirement, hotel and retail sectors.
The survey, designed to measure business confidence, found property industry confidence across the country decreased slightly over the quarter from 135 to 132 but remains high.
Ken Morrison, Property Council CEO, says the positive results send a clear message to policy-makers that now is the time to make the sector a priority.
“Governments at a national and state level must urgently start putting in place the policies to facilitate further sustained growth in this critical sector,” says Mr Morrison.
“Outside of property, there is no other industry in a position to step up and drive economic growth the way we can – and are already.”
Property and construction currently constitute a major slice of the economy, accounting for around 12.5% of GDP.
The Property Council will be campaigning throughout 2015 to achieve meaningful tax, key infrastructure progress and to ensure housing affordability is properly addressed.
“With the right policy settings the industry can be an even bigger source of economic growth as other industry sectors contract.”
ANZ chief economist Warren Hogan says a positive outlook for property values and construction is critical to the near-term Australian economic outlook as non-mining business investment and household consumption reflect a sluggish transition to non-mining drivers of economic growth.
“Despite a relatively positive outlook for the property sector, we continue to expect the RBA to remain on hold for an extended period of time,” Mr Hogan says. “However, we acknowledge the near-term risks are more skewed towards a cut in the first half of 2015, particularly if the unemployment rate increases or the AUD doesn’t sustain its recent depreciation.”
The quarterly survey is one of the largest measures of business confidence in Australia. The full results can be accessed here.