Property industry confidence levels are approaching record highs as the sector leads Australia’s economic recovery from the COVID-19 pandemic, according to the latest ANZ/Property Council industry survey.
Three key takeaways
Nationally, confidence levels were up 19 index points and forward work expectations by 22 points. Staffing level expectations rose by 12 points and economic growth expectations jumped significantly from 13 to 38 index points, the highest level ever recorded in the survey’s 10-year history.
Capital growth expectations over the next 12 months for the housing and industrial sectors now sit at the highest levels recorded across all jurisdictions.
“While the economy still faces significant challenges, the property industry is clearly buoyed by the speed of our turnaround and the strong demand they are seeing, particularly in the residential and industrial sectors,” Morrison says.
“The survey also showed an easing of concerns about the office sector as more CBD workers return to their workplaces.”
Morrison says government stimulus and business support measures “have done their job”.
ANZ senior economist Felicity Emmett says improving property sentiment reflects “stellar economic performance, a large pipeline of work for the coming year and a strong outlook for property prices”.
More than two thirds (64%) of respondents believe the impact of the coronavirus outbreak on their business will improve over the next three months.
“With many stimulus measures having now run their course, it is critical that this confidence is backed up by policymakers through measures that will continue to help reactivate our CBDs and upscale our quarantining capacity.”
Below is a state-by-state roundup…
New South Wales
Sentiment in NSW bounced from 123 points in the December 2020 quarter to 145 index points in March. “Importantly, commercial office capital growth expectations are also showing a strong recovery, a positive move for the State’s economy,” says Property Council executive director, Jane Fitzgerald. “Residential capital growth expectations are off the charts – accelerating concerns about housing affordability in NSW.”
At 124 index points, property industry confidence in Victoria lags the rest of Australia. However, Victorians are optimistic that the situation will improve over the next three months. The Property Council’s Victorian executive director Danni Hunter calls for government to partner with the private sector “in a concerted effort” to encourage workers back into Melbourne’s CBD. One office worker generates enough activity to support the employment of another five people in Melbourne’s CBD, she says.
Sentiment bounced from 124 to 144 index points over a quarter, and has confidence has nearly tripled since the height of the COVID-19 pandemic. Property Council Queensland executive director, Chris Mountford, says the results “highlight a remarkable recovery” but warned that the positive results were recorded prior to Brisbane’s most recent lockdown. “It is well documented that these lockdowns cost our economy millions and impact on the confidence of employees to return to their places of work.”
WA has the most positive outlook in the nation, rising a massive 24 points in the last three months, to 157 index points. Expectations around forward work schedules, staffing levels and economic growth are also the highest in the country. Property Council WA executive director Sandra Brewer says confidence in the state government exceeds that in any other jurisdiction. “A commitment to collaboration between industry and government provides the perfect platform to address some of the biggest handbrakes on growth.”
Confidence sits at 142 for the March 2021 quarter, lifting 14 points – or 11 per cent – since last quarter. “Business confidence has improved by 135 per cent in 12 months – the biggest yearly increase on record in South Australia,” says Property Council SA executive director Daniel Gannon. “Over the past 12 months, we’ve learned a lot about business innovation and organisational nimbleness. Here in South Australia, we are comparatively safe, healthy and resilient, we’re getting back to business and reopening our economy as confidence continues to lift.”
There were 830 respondents to the online survey between 15 March and 31 March 2021. Most of the survey responses were collected before South East Queensland’s recent lockdown. To learn more about the Property Council’s research, head over to the Data Room.