Counting our contribution
Wonk alert! This editorial is chock full of juicy stats. How big is our industry and what does it contribute to the community? Here are the answers …
What is our economic contribution?
Our industry is the nation’s largest – it’s 11.5 percent of the total economy.
In 2010, property services and construction added $147 billion to GDP directly. There’s also $219 billion of flow-on demand not counted in the 11.5 percent.
The mining sector charts at number five on the GDP rankings, albeit with a bullet.
What’s that mean for jobs?
Think of the mining sector and multiply its workforce sixfold.
Our industry employs just under 1.3 million workers, or 12.8 percent of the total job market.
We are the nation’s largest employer and biggest contributor to pay packets.
Health and social assistance is the next biggest employer at 10.3 percent of the workforce.
How much tax do we pay?
The property industry forked out more than $34 billion of federal and state taxes last year.
Our industry is the biggest single contributor to Treasury coffers by a country mile. We account for a massive 36 percent of state and territory governments’ tax take.
How much is spent on construction?
This year’s construction spend will be about $111 billion, 70 percent of which is slated for residential buildings.
A further $109 billion will be spent on civil infrastructure, which we haven’t counted in our economic contribution and employment stats.
How many Aussies invest in property and how much do they invest?
The market value of listed and unlisted property funds under management is around $302 billion.
Nearly 780,000 Australians invest directly in property.
More than 11.6 million Australians enjoy a stake in investment property through their super fund.
How much building stock is there and what is it worth?
There are 9.15 million homes and around 330 million sqm of non-residential stock.
The replacement cost of residential buildings is around $3.75 trillion. RP Data reckons its market value is $4.54 trillion.
The replacement cost of the non-residential stock is around $675 billion.
How much more will we need?
According to the Property Council/Allen Consulting Group Our Nation app (www.ournation.org.au), Australia is due to grow by around 6.2 million people within 20 years.
This scenario assumes annual net migration of around 180,000 – you can use the Our Nation app to insert your own immigration assumptions if you like.
Clearly Australians will need more community services and the infrastructure to deliver them.
Put another way, by 2030 we need:
More homes – 2.7 million
More childcare places – 104,000
More aged care places – 133,000
More classrooms – 29,000
More hospital beds – 24,000
More office space – 23 million sqm
More retail space – 13 million sqm.
We also need to provide capacity to deliver another 505 gigalitres of water, 122,000 terajoules of energy and the road network for a further 64 billion kilometres of vehicle travel each year.
There are smart and dumb approaches to managing this growth.
There’s no doubt our industry has the capacity to deliver anything asked of it. We can also modify our consumption behaviour.
However, we shouldn’t ignore the reality of growth and the need to get smarter about delivering community services when and where they’re required.
Can anyone doubt the importance of strategic planning when the nation is crying out for massive productivity improvements and greater prosperity?
What is the property and construction industry?
Property and construction covers residential and non-residential building finance, design, development and management. We’ve excluded civil infrastructure, which would make the stats even larger!
The industry encompasses land development, building trades and real estate services, as well as portions of finance, insurance, funds management and the relevant bits of professions, such as architecture and engineering.
Where did this info come from?
AEC Group – economic data (2010)
Construction Forecasting Council – construction spending (2011)
Property Investment Research – funds data (2011)
RP Data – residential property market value (2012)
Allen Consulting Group – demographic demand forecasts (2012)
National Housing Supply Council – stock of residential buildings (2011)
Property Council – stock replacement cost, stock of non-residential buildings (2012)
Make My City Work – Sign Up
If you believe it’s time for politicians to get serious about our cities, please explore www.makemycitywork.org.au
If you’re after a picture of Australia’s future (and the drivers of property demand), check out www.ournation.org.au