New Zealand's property industry contributes 15 pct of total GDP in 2019: survey

2021-07-26 01:05:57 GMT2021-07-26 09:05:57(Beijing Time) Xinhua English

WELLINGTON, July 26 (Xinhua) -- Property became New Zealand's largest industry, contributing 41.2 billion New Zealand dollars (about 28.7 billion U.S. dollars), or 15 percent of its total GDP in 2019, according to a new survey from the Property Council New Zealand.

The Property Council New Zealand Chief Executive Leonie Freeman said Monday that the Property Industry Impact Report 2021, commissioned by the council in partnership with Urban Economics, underscores the impact of the sector, with property out-gunning other top GDP contributors such as manufacturing (11 percent), agriculture (6 percent) and health (7 percent).

In 2019, the wider economic impact of the property industry was 115.6 billion New Zealand dollars, including a direct impact of 41.2 billion New Zealand dollars plus cumulative supplier and employee activity. As a sector, property employs 9 percent of New Zealand's workforce, said Freeman.

"The numbers are vast and growing, with an extraordinary 19 percent (or 19.6 billion New Zealand dollars) growth in the property industry's direct contribution to GDP between 2009 and 2019," he said.

Even more interesting is the number of New Zealanders who unconsciously invest in property via their Kiwisaver schemes, with 1.8 million people having an investment in property. Across all 29 of New Zealand's Kiwisaver schemes, 3.3 billion New Zealand dollars (4.4 percent) in Kiwisaver funds is invested in property, he said.

Freeman believes the data could help dispel the stereotypical image of a property investor that many of the public hold in their imagination.

"Many New Zealanders view property, especially commercial property, as reserved for the wealthy or elite when that couldn't be further from the truth. If you want to see what the typical commercial property investor looks like, I suggest you pick up a mirror."

As of this year, the value of listed property companies (those listed on the NZX) was approximately 53.0 billion New Zealand dollars, representing 30 percent of the value of the entire New Zealand stock market.

"Add to this the 1,305 billion New Zealand dollars value of New Zealand's residential property stock and 243 billion New Zealand dollars value of our commercial property stock and you have one enormous economic contributor," said Freeman.

New Zealand's house prices hit new record highs in the last several months in a row despite the pandemic, while record low interest rates boosted demand for housing and credit.

As the housing demand kept at a high level, the supply touched low. In some regions, inventory levels were at lowest point ever. The New Zealand government revealed its package housing plan in March to cool down the soaring property market. (1 U.S. dollar equals 1.43 New Zealand dollars) Enditem