Real Estate Agents in Australia March 2012 4
Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage Executive Summary
After three difficult years, the Real Estate Agents industry stabilised in 2010-11, in line with improvements in domestic economic and financial conditions and growth in residential property prices in much of Australia. Growth in the demand for commercial (i.e. retail, office and industrial) property strengthened property investment. However, this was offset by weakening residential demand since the beginning of 2011. As a result, IBISWorld estimates that revenue for the Real Estate Agents industry will increase by about 0.9% in 2011-12, to reach $9.02 billion. The growth in 2010-11 followed three years of declines. Over the past five years, industry revenue fell by 1.1% per annum due to reduced demand for properties
from investors, commercial businesses and home owners. Deteriorating economic conditions, rising debt levels and tighter access to finance directly affected property investment. Growth in industry revenue from 2011-12 is likely to stem from increasing commercial property, which accounts only for a minority of revenue. IBISWorld expects that improvements to economic and financial conditions and steady population growth through 2016-17 will drive domestic property investment. Residential and property sales and leasing volumes are forecast to diverge, with residential demand decreasing temporarily. As a result, industry revenue is expected to grow by 1.6% per annum over the next five years, to total $9.77 billion in 2016-17.
Key External Drivers
Housing affordability The level of housing affordability affects the ability of people to purchase their own home, which can affect the volume of residential sales and rental transactions.
economic activity, hurting business and consumer demand for property. In addition, rising interest rates reduce the viability of property development.
Residential housing loan rates Rising interest rates negatively affect property prices, which causes potential property vendors to defer selling. Rising interest rates also negatively affect
Residential investment property loan approvals Loan approvals for investment property are an indicator of investment demand for property.
Residential housing loan rates
150 100 50
Published on Sep 25, 2012