Sebastian Stevens, BDO Property & Construction Leader and Andres Reith, BDO Property & Construction Partner, took part in this year's The Property Congress – a property forum which unites national and international property leaders to engage in an industry dialogue on property drivers, trends and hot spots.
Here's what our team uncovered.
Australia’s luck is running out, according to Peter Costello
Former Federal Treasurer Peter Costello delivered a warning in his keynote speech at this year’s Property Congress in Sydney saying "although Australia is far from recession, the country’s economic luck could be running out", he said.
Speaking at the two-day Congress, Costello said that wages were falling in real terms, disposable incomes had peaked and that the household savings ratio stood at about 10 per cent, in contrast to the boom years of the 1990s when people were happy to spend freely. He said that consumer confidence was low and that action was needed to restore confidence and strengthen the economy.
Costello, who is Australia’s longest serving Treasurer, commented the country needed a more ‘open’ economy combined with workplace flexibility plus a commitment to reducing the deficit and becoming more competitive. He said achieving this could be tough in the current climate where interest rates are rising and workplaces are increasingly inflexible.
He also advocated a fiscal strategy based on reducing expenditure rather than increasing taxation and said he was opposed to the introduction of a higher rate of GST. “Australia should only go to a higher GST if we abolish other taxes and reduce income tax,” he said.
Costello was relatively optimistic about the property market, which attracts increasing numbers of overseas as well as domestic investors. He said growth would continue, driven by the rising population and that property is not particularly expensive in Australia. He said it is the cost of land, rather than building costs, which keeps property prices high.
He also believes Australian property will continue to be viewed as a lower risk investment option, particularly by older people who want to reduce their exposure in equities.
The Property Congress continues today. Former Australian Ambassador to China, Dr Geoff Raby, Chairman and CEO of Geoff Raby & Associates, will give the international keynote speech.