Property investment contributions double over two decades

New figures from the Australian Bureau of Statistics (ABS) show that rental, hiring and real estate services represented 15 per cent of all non-mining investment in Australia from 2014-2015. The total value of all such real estate investments has now reached almost six billion Australian dollars.

This is more than double the contribution from 1994-1995, which was valued at 7.1 per cent.

Non-mining investment, as defined by the ABS, consists of all those industries that are not directly related to mining. This includes construction, manufacturing, agriculture and forestry, and other such industries. At 15 per cent, retail estate services is now the single largest contributor to non-mining investment values, according to the ABS.

The ABS also explains that historically, non-mining investment totals have seen steady increases of 0.7 per cent per quarter since June 2010. This has also coincided with the 0.9 per cent average increase in gross domestic product per quarter: the ABS describes these two factors as being “aligned”.

Return on investment in real estate outpaces other common options

Australians who have invested in residential investment property, either through extensive private capital or property investment loans, have seen an average of 7 per cent return on their investments from 2005 to 2015 before tax. This according to an Australian Securities Exchange (ASX) report that looked at investment returns over the course of a decade.

This outpaced other investment options such as fixed income and cash, continues their report.

With the ASX describing overseas Australian equities as “lagging” and there being a “poor outlook for bonds and the Australian dollar”, it may be that property investment is one of the few concrete options left for most Australians.