Emerald Chamber of Commerce Inc

The Economy - May 30, 2016

Real estate most profitable industry in the country

Move over mining, new data from the ABS shows that 'property operators and real estate services' was Australia's most profitable industry in 2014-15.

Real estate was the stand-out performer when the Australian Bureau of Statistics released 2014-15 Australian industry sector performance data last Friday.

The data shows the size, importance, and performance of 19 Australian industries, which can be broken down into 96 sub-sectors.

This more-fine tuned data shows that 'property operators and real estate services' recorded a profit margin for the year of 49.8%, the highest profit margin of all sub-sectors. The category includes real estate agents and managers of residential, commercial, and agricultural property, according to the ABS.

While oil and gas extraction recorded the highest capital expenditure for the year at $59.3 million, property operators and real estate services recorded the next highest capital expenditure with $36.0 billion.

Craig James, chief economist CommSec, said, "The results are notable because it is clear that the 'baton pass' from mining to the property sector is happening across two sectors that are similar in size and importance."

 James said that real estate can be seen as having greater flow-on benefits to the economy than mining.

"Arguably, the multiplier effects from the property sector are broader and more significant than the mining sector," he said.

The President of the Emerald Chamber of Commerce, Mr. Victor Cominos said that he believed that the current and future Federal Government’s economic policy is going to put a dampener on the Real Estate Industry.

“The proposed changes whereby every sale of over 2 million dollars will require an Australian Tax Office certificate to avoid withholding tax is going to reduce the number of properties that will be available on the market”.  

Mr. Cominos said, “In time through the change of regulations the Federal Government will involve the ATO in every sale of property no matter how low the sale price.

“Without the ATO certificate the buyer will be required to lodge 10 percent of the purchase price with the ATO, why would the seller be a party to such a immoral transaction”, said Mr. Cominos.

This story has been brought to you by the Emerald Chamber of Commerce Inc.
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