After contributing 0.5 percentage points to the annual rate of GDP growth in Australia in each of the past two years, it looks as though dwellings investment will add almost nothing to growth this year. This is one reason why we believe that 2017 will be another disappointing year for the Australian economy, with GDP growth accelerating from around 2.3% last year to only 2.5%. Housing has been a big help to the Australian economy in recent years, but that might be about to change. On average over the past two years, dwellings investment and ownership transfer costs (the commissions of real estate agents) have directly contributed 0.5 percentage points (ppts) to the annual rate of real GDP growth. That hasn’t offset all of the drag on growth from mining investment, but the bigger boost from dwellings investment did come at almost the same time as the drag from mining investment intensified.
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