How does the real estate industry impact NSW?

How does the real estate industry impact NSW?

12 November 2018

Did you know, NSW real estate is a $107 billion industry annually?[1] It’s bigger than the mining industry ($21 billion[2]), the retail industry ($22.8 billion[3]) and tourism industry ($38.1 billion[4]).

We know, impressive right?

So now a little more about the impact of real estate on the NSW economy and how real estate professionals contribute to a stronger state.

There are approximately 37,703 real estate agents employed across NSW.[5] A typical agent is a woman in her 30s, working full-time and earning around $58,468 in a job she juggles with childcare and unpaid domestic duties.

Challenges of the NSW market

There are more than 3.05 million dwellings across NSW, including 2.024 million houses and 1.03 million units.[6]

With the median sale price in Sydney sitting at $985,000, it currently takes 12.1 years to save a deposit on a Sydney property (compared to 10.8 years for properties in Melbourne). It’s not surprising then that Sydney and NSW are the least affordable places to live in the country.[7]

It doesn’t help that across Sydney only 306 suburbs have a median sale price is below $1m and 118 suburbs have a median sale price above $2 million.

In suburbs with a median sale price of $1.5 million, $68,000 in stamp duty tax goes to the Government per transaction. (This doesn’t include the extra ten per cent in GST).

Research from real estate group LJ Hooker[8] identified the high cost of stamp duty played an important role in the lack of property listings, with just over a quarter of respondents stating the cost of buying a new home was too high due to stamp duty.

To put the impact of this tax into perspective, in the 2017–18 financial year, stamp duty contributed $8.4 billion to the NSW economy across 220,313 transactions. To illustrate this further, in NSW alone, 51 per cent of renters indicated they want to buy an investment property first to support their dreams of home ownership in the country’s most unaffordable state.

Importance of the NSW property industry

The importance of the property industry – and its impact on NSW voters – is extensive, with 49 per cent of residents owning a property and 33 per cent renting. (12 per cent live at home and six per cent have other arrangements).[9]

This bolstered REINSW’s decision to resign from the Real Estate Reference Group. It also drove REINSW’s call for a dedicated Property Services Commissioner that can accurately represent an industry that so significantly contributes to the NSW economy and community.