The sheer amount of media coverage that residential property generates is astounding. Depending on what you read, markets are booming one day and crashing the next, leaving investors confused. Shares aren’t in the headlines every day – so why is property?
Why is residential property constantly in the news? Real estate markets are discussed in the media every day, leading many people to feel overwhelmed, fatigued and confused about how and where to invest. Why is this the case? The answer is simple: property is the single biggest industry driving Australia’s economy. It is also the largest component of Australia’s wealth.
According to Corelogic, residential real estate alone underpins Australia’s wealth with the asset class worth $7 trillion. It is 7 times larger than commercial real estate which represents about $1 trillion. By comparison, Australian listed stocks represent $1.8 trillion and the total superannuation savings represent $2.3 trillion.
This partly explains why everyone talks about residential real estate and there is much less coverage of commercial real estate. The other reason that ensures that residential property is prominently in the news is that it affects pretty much everyone individually, being a property owner, a renter or an investor. By contrast commercial real estate is not front and centre in the life of most people.
Overall, the real estate industry, including property-related financial, professional and construction services, contributes $180-$200 billion to the economy each financial year – equating to around 11 per cent of GDP.
As a whole, the property industry provides more than 1.4 million jobs Australia-wide, according to a recent report by AEC Group, knocking healthcare and social assistance off the perch as the nation's biggest employers. Furthermore, the property industry is growing; between 2013-14 and 2015-16, the number of jobs in the property industry grew by 22 per cent.
To summarise: property is our largest industry, our largest employer, our largest economic driver, and it’s growing. This means there are hundreds of ‘vested interests’ in real estate, all trying to shape public opinion. Each is trying to profit in their own way, whether it’s through assisting people in buying, selling, investing, building, financing or renovating their property. As a result, there is a steady stream of news, reports, surveys, studies, success stories and more, flooding the media on a daily basis.
When property is ‘in your face’ all the time, it becomes very wearing. People often don’t know what to believe or who to trust, and they don’t know how to sort real news from phony headlines; they become so overwhelmed that they freeze, procrastinate or even back away from the idea of investing altogether. This is a real shame, because when you invest the right way, property has the potential to set you up for a financially secure future.
If this currently resonates with you and you are wondering what step to take next, we have a few suggestions for you: