As a nation, Australia is obsessed with property. It’s simply a part of our culture. And that love of property is clear when you look at the data:

Residential real estate accounts for $7.2 trillion of the Australian economy.
52.4% of all household wealth is held in housing.
And every year, there is $278.3 billion worth of property transactions.

But where does that love come from? Why are Australians obsessed with property?

The first element is cultural and aspirational: owning a house with a white picket in the suburbs is a phase of life—it’s part of settling down. In other countries, families will happily live out of apartments. That’s not the case here, and that drives demand.

The second factor is Australia’s generally strict zoning laws and requirements. Only a very small amount of land, relative to the country’s size, is released for development around the nation’s capital cities each year. This restricts supply.

That demand combined with reduced supply has naturally led to solid investment performance, and over time, more and more speculative property investors have gotten involved. Beyond the cultural desire to own a property, there’s a solid financial reason to do so.

There’s also the variety of legislation and stimulus measures which have, directly and indirectly, propped up the property market even further: capital gains tax incentives, negative gearing, first home buyer grants, the recent HomeBuilder grant; the list goes on.

All of these factors have worked together over the last forty years to transform property into the backbone of Australia’s economy.