The cost of construction is on a historic high in Australia. Over the past year, the cost of building has increased by 4% which is not just higher than the historic average, but is also higher than the growth over the past five years. The housing market is incredibly buoyant right now, and it has affected the cost of construction throughout the country.
The buoyancy of the housing market might have increased the profit margins of the construction companies in Australia, and increased the cost of all equipment too. This situation has not done anything to increase the wages or the benefits of the people involved in construction work. The construction workers are not responsible for this increase in construction cost, and they are certainly not reaping the benefits of the same.
Houses and office spaces have become more expensive to buy, but the rents have not gone up in a proportionate manner. In fact, the cost of renting is at an all- time low since after the 2000s. While this might not be good news for people looking to buy houses now, or for people trying to rent their home out, it is good news for people who already have a mortgage, for the RBA has reduced mortgage to a mere 2.5%.
After a decade of negotiations and talks, Australia and China are going to enter into a free trade agreement together. The deal will be drafted and signed in 2015 and will promote the existing economic relations between the countries.
This deal will benefit Australia, for it will provide local winemakers, dairy farmers, and other professionals tariff free access to Chinese markets. 85% of Australian export to China (including beef, leather and minerals) will be freed from tariffs. The Chinese market is quite substantial in size and it will prove to be a goldmine for Australian suppliers in the future. China, on the other hand, will be able to export shoes, vehicles, clothes and electronics into Australia, duty free. China will also be able to invest up to the tune of 1.02 billion in the Australian market, without being subject to governmental review. Regulations in the service sectors of both the countries will be loosened.
Australia has been promoting it’s relationship with South Asian countries over the past few years. The area is valuable in terms of trade, and in terms of market. This is the third economic fair trade agreement Australia has signed with a South Asian country in the past year- previously, treaties were signed with South Korea and Japan.