The real estate and property industries had a stellar 2015 financial year, according to a report from Commsec based on new statistics from the Australian Bureau of Statistics (ABS).
Each year the ABS releases data highlighting the size, importance and performance of Australian industries. While data is regularly produced on the top-level 19 industry sectors, greater insights are possible when you drill down through the 96 sub-sectors (80 of which there is regular data available).
The sub-industry “Property operators and real estate services” was the fourth biggest sector in 2014/15 in terms of Industry value added; second highest in profitability; second highest on the investment rate; and 85 per cent of businesses in the sector made a profit in 2014/15.
This data showed 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.
CommSec chief economist Craig James 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."Mr James said 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.