Property Australia

Industry sentiment sours

PROPERTY AUSTRALIA October 8, 2019

Sentiment across Australia’s property industry has fallen after its post-federal election bounce and now sits below the historical average, according to the latest ANZ/Property Council Survey.

One of Australia’s largest property industry pulse checks, the ANZ/Property Council Survey asked 1,068 industry participants for their predictions for the December 2019 quarter.

Sentiment has fallen by 10 index points to 118 – below the historical average of 126 set since the survey’s inception in 2011. A score of 100 is considered neutral.

National economic growth expectations dropped by 18 index points into negative territory of -14.

“With the property industry accounting for 13 per cent of GDP and housing construction falling sharply, this is a significant shift in sentiment,” says the Property Council’s chief executive, Ken Morrison.

The survey signals a need for “measures which will stimulate investment and spending and underpin confidence,” Morrison says. He urges federal, state and territory treasurers to “put reforms which will stimulate investment in the property sector top of their lists”.

Confidence declined across all markets, but most significantly in South Australia which fell by 43 index points. This is the biggest quarterly fall of any state or territory in the survey’s history.

Morrison says the South Australian Government’s “risky changes” to land tax represent a “massive own goal” for the state.

“There’s a clear message for all Australian governments – confidence is hard-won and easily lost through poorly conceived, ad hoc or prejudicial policy changes.”

Residential price rises and another interest rate cut are both on the cards over the next 12 months, according to those surveyed.

ANZ’s senior economist Felicity Emmett says the survey reveals a “strong improvement” in sentiment, as construction activity, credit availability and prices all pick up. But price gains will be “relatively short-lived”, as more supply comes on stream and credit policies remain constrained.

Commercial property sentiment continues its slow downward trajectory as “weakness” in retail weighs heavily on the sector, Emmett explains.

National forward work expectations have moderated by five index points, with declines across all state markets, except for the ACT which recorded a 38-point increase. Staffing level expectations have fallen by four index points to the lowest level in more than six years.

Sentiment towards the federal government soared in the previous quarter but has moderated significantly since, falling from 18 to six index points. Thirty per cent of survey respondents identified cities and infrastructure delivery as the most important issue for the federal government, followed by housing supply and affordability (17%); energy, environment and emissions (15%); economic management (14%), tax reform (13%) and planned population growth (11%).

View the ANZ/Property Council Survey historical data series in the Data Room and learn more about supporting sponsor RCP.

Congratulations to Robyn Hyslop from Lendlease, winner of the ANZ/Property Council Survey competition, who takes home a $500 Apple voucher.

Tags: RESEARCH