The Importance of Victoria’s Property Industry
The property industry is the largest industry in Victoria, contributing a staggering $39.6 billion or 12.2 per cent of Victoria’s GSP (gross state product).
It is Victoria’s second largest employer after manufacturing, providing full-time jobs for more than 312,000 people.
The Victorian property industry also contributes to employment and economic growth through flow-on demand for goods and services worth $54.5 billion in areas such as electricity, water, gas, food and accommodation.
On top of all that, it also contributes $5.6 billion in Victorian taxes, which makes it the largest contributor in the state (almost 40 per cent of total tax revenue).
In a recent report, the Property Council of Australia emphasised the importance of the Victorian property industry and the vital role it will play in Victoria’s future.
The Property Council of Australia called on the Victorian Government to introduce incentives and policies that will encourage the property industry to continue growing.
In the Victorian residential property market, housing prices are at their lowest after a slump in the market due to a lack of consumer confidence. This is expected to trigger investor activity, with investment property tipped to be the strongest growth segment in the coming year, as a slow recovery takes place.
Inner-city Melbourne is expected to be one of the standout growth areas, along with those rural areas with good infrastructure and transport links such as Shepparton, Wangaratta and Ballarat. Melbourne’s western and eastern growth corridors are also expected to show modest growth.
Commercial property sales are also predicted to increase during the year due to new jobs and business growth, with heavy industry and the office market showing the strongest growth.
Surprisingly, the introduction of the carbon tax is not expected to have a major impact on the commercial property market, as many investors are adapting to the change by seeking out more energy-efficient commercial premises to invest in.
The Victorian government recently released its budget and the Property Council of Australia applauded its short-to-medium-term commitment to improving infrastructure in order to stimulate economic growth, but called for more long-term plans to fund and deliver infrastructure.
The development of infrastructure is crucial for the creation of jobs and leads to long-term benefits such as population growth, business expansion, an increase in land values and property investment and social benefits through increased access and opportunities.
Victorian Executive Director of the Property Council of Australia, Jennifer Cunich, stressed that the property industry is responsible for building Victoria’s towns, cities and ultimately its future and that more attention needs to be paid to its continued health through the creation of incentives and policy frameworks that encourage growth.
The statistics clearly show that the property industry makes a huge contribution to Victoria’s economy through employment, goods and services and tax revenue. It is therefore extremely important to ensure it receives all the help it can get in these tough economic times, and the Property Council of Australia will be doing everything it can to see that happens.