Property 'New Zealand's largest industry', report says

Property is New Zealand’s largest industry, contributing $41.2 billion a year to gross domestic product (GDP), or 15 per cent, the Property Council says.

The council’s Property Industry Impact Report, released on Monday and completed in partnership with Urban Economics, puts property ahead of manufacturing, at 11 per cent of GDP, agriculture and 6 per cent and health at 7 per cent.

“In 2019, the wider economic impact of the property industry was $115.6b, this includes a direct impact of $41.2b, plus cumulative supplier and employee activity,” said Property Council chief executive Leonie Freeman.

The numbers are vast and growing, with an extraordinary 19 per cent, or $19.6b growth in the property industry’s direct contribution to GDP between 2009 and 2019.”

The report said property had an indirect impact of another $31.8b and an induced impact of $42.5b.

According to the report, New Zealand’s stock of residential property is now worth $1305b. The stock of commercial property is valued at $243b.

Listed property companies account for 30 per cent of the New Zealand stock exchange with a total market capitalisation of $53b.

The report said the industry is the fourth-largest employer in the country, accounting for 9 per cent of total employment.

The value of property assets in Auckland is around three times that of any other region at $700b, contributing $12b to the regional economy. Auckland rates were producing $2b in revenue a year, 43 per cent of which was from residential property.

The report found the economic contribution of the property industry to the Auckland economy was that each dollar contributed by the industry resulted to $1.80 of "flow-on” economic impacts.

In Wellington, property was adding $4b to the regional economy and employing 8 per cent of the population, and in Christchurch property was worth $4.7b a year and employing 11 per cent.

The report was released in the context of house prices around the country rising by 28.7 per cent to a national median of $820,000 over the year to June.

 

 

Despite being encouraged by real estate agents, Simon Oosterman refused to sell his home at auction as he feels the system is unfairly rigged against young first-home buyers.

Five out of the 16 regions reached new record median prices, the Real Estate Institute said.

Freeman said many people had invested in property without realising it, through their KiwiSaver schemes.

“Across all 29 of New Zealand’s KiwiSaver schemes, $3.3 billion (4.4 per cent) in KiwiSaver funds is invested in property.”

Ratings agency S&P said last week that the rate of house price increases in New Zealand could pose a risk to the stability of the banking sector.

“Property Council is proud to champion New Zealand’s largest industry. Property is about so much more than buildings or profit, it’s about people and communities. We chose to spend our lives in these spaces, to raise families, to create connections, to build businesses, to belong,” Freeman said.

“Our members shape the cities and spaces where Kiwis live, work, play and shop - that is the power of property.”

Article Source: stuff.co.nz