The Australian property sector directly accounted for 11.5 per cent of GDP during the last financial year.

Property has emerged as the largest industry within the Australian economy, eclipsing both the mining and financial services sectors.

Research by market consultancy AEC Group conducted on behalf of the Property Council of Australia indicates that the property sector contributed $182.5 billion to the national economy during previous financial year.

This amount is equivalent to 11.5 per cent of GDP, and marks a doubling of the industry’s share in the national economy in the space of roughly a decade

Th property industry, defined as encompassing property financing and associated professional and construction services, also accounted for a further $279.7 billion in goods and services created by flow-on effects, making its total contribution to GDP in last year approximately $462.2 billion.

According to the Property Council the sector is responsible for the direct employment of 1.1 million people, as well as generates another 1.54 million jobs indirectly.

The AEC Group report also claims that the property industry paid $72.1 billion to the federal and state governments last year in the form of taxes, rates and fees, comprising 16 per cent of all taxes paid to the state within Australia. The rate at which the Australian property sector is taxed is twice the average for OECD nations.

Based on the increasing heft of its contribution to Australia’s economic output, chief executive of the Property Council Ken Morrison is calling for the government to introduce measures to further expedite the sector’s growth, including reforms to the tax regime and planning protocols.

“If we can unlock the potential to increase property’s contribution even further that will mean more jobs and more prosperity for Australians,” said Morrison. “Governments can help make this happen by abolishing our most distorting taxes – like stamp duty – and streamlining planning processes to make housing more affordable for all Australians.

Morris’s remarks come just as regulators striven to cool the housing boom and dampen rising property prices.

The Australian Prudential Regulation Authority (APRA) has been putting greater pressure on banks to tighten funding for housing investment. A slew of major banks, including ANZ, BankWest, Commonwealth Bank, Macquarie Group, NAB and Westpac, have since lifted the bar for obtaining home investment loans.

Members of the property industry have warned that some of the measures adopted by lenders will serve to lock out first-time investors from the market over the near-term.

“Some of the things I’ve seen are basically banks saying we don’t need your business,” said Dean Bassett, Rocket Property Group mortgage broker.

The impact of restricted lending by banks could be diminished, however, by the fact that Australia’s non-bank lenders, who lie beyond APRA’s regulatory ambit, are already making haste to pick up the slack.

Queensland-based Firstmac recently raised $1 billion via the sale of mortgage-backed securities, in what is reportedly the largest deal by a non-bank lender since the Great Financial Crisis.