Although the RBA has pinned its hopes on a resurgent housing sector, it appears that construction is unlikely to fill the void that mining investment is due to...

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Although the RBA has pinned its hopes on a resurgent housing sector, it appears that construction is unlikely to fill the void that mining investment is due to leave. The reasons for the malaise in construction investment are supply-side constraints: high costs, planning red-tape, and excessive taxes on new development. Australia's property transaction costs are among the highest in the developed world, representing almost 14% of a property's value. Moreover, builders are currently stifled by skill shortages, compliance costs and banks reluctant to lend. Despite Australia's chronic housing shortage and record low rates, housing investment is likely to remain stagnant.

Australia economy housing

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