Property Australia

Uptick in confidence, but challenges remain


A strong sentiment bounce post-election is a positive sign for Australia’s property industry, but investment-sapping taxes undermine optimism, finds the latest ANZ/Property Council Survey.

The regular litmus test of industry confidence has picked up by 13 index points for the September 2019 quarter, reversing a year of decline. The national confidence index now sits at 128 points. A score of 100 index points is considered neutral.

Industry confidence improved across all states and territories, except for the ACT.

A “quadrella” of positive policy news – no changes to negative gearing and capital gains tax, an interest rate cut, APRA’s lending standards review and the proposed first home buyers loan deposit scheme – have “translated into a strong sentiment bounce,” says the Property Council’s chief executive Ken Morrison.

“However, the property sector is not immune from the challenges facing the rest of the economy and a number of state governments have just embarked on a range of investment-sapping tax increases.

“State budgets in Queensland, Victoria and South Australia have hit the property industry with arbitrary and poorly-designed tax increases which will hurt investment and job creation, and risk undermining the current sentiment turnaround,” Morrison says.

According to David Plank, ANZ’s head of Australian economics, “emerging signs” of stability in the residential property market are reflected in the survey, and most jurisdictions show “material improvement”.

Plank notes the increase in credit availability, which “proved to be a reliable indicator of shifts in housing activity in the past and, if it remains so, it suggests better times ahead”.

The lift in sentiment in the commercial property sector is also encouraging, Plank says, as this “provides some reassurance that the recent weakness in the domestic economy and the more negative global environment hasn’t flowed through into a sharply weaker outlook for business investment”.

A state-by-state roundup reveals:


New South Wales

NSW property industry confidence has increased 17 index points from 109 to 126 over the quarter but has fallen eight index points over the 12 months to September 2019.

Property Council executive director Jane Fitzgerald is in “no doubt” that political uncertainty – both state and federal – matched with a slowing residential market has taken its toll.

But a “strong” budget with “record investment in infrastructure and solid outlook for growth, despite reduced stamp duty revenue, should help to drive confidence across the property industry”.



Property market confidence in Victoria has rebounded for the first time in four quarters. But Cressida Wall cautions that further government action is required to guarantee long-term housing supply and affordability.

“Industry confidence in Victoria has risen nearly 13 points from the last quarter, and whilst we are encouraged by early signs of market recovery, approvals on new residential property are down 25.09 per cent compared with last year. It is essential that we take long-term action to address continuing shortages in housing supply,” Wall says.



Industry sentiment in Queensland increased from 113 index points to 124 index points, which the Property Council’s executive director Chris Mountford attributes to the federal election results.

While the survey records elevated office and residential capital growth expectations, Mountford says the story would have been different in the wake of the state budget.

“The state budget has imposed devastating and harmful taxes on our industry, driving investment away from Queensland and increasing the cost of doing business,” Mountford says.


South Australia

While South Australia has delivered the nation’s highest level of property sector confidence for six consecutive quarters, increasing by seven points to 144, executive director Daniel Gannon notes there are three reasons why confidence could “fall off a cliff”.

The $120 million land tax aggregation budget measure, the state’s “anti-competitive” land tax regime and the foreign investor tax could “scare off investors and hurt superannuants and their nest eggs”.


Western Australia

Confidence has jumped nine index points – from 125 points in June to 134 points for September – following the federal election. Sentiment out West is now the second highest of any state or territory.

The results “paint an encouraging picture” says Property Council WA executive director Sandra Brewer. “Our run of four quarters of declining confidence has come to an end, and all the key indicators are now pointing back in the right direction.”


Australian Capital Territory

The ACT went against the national trend, with local industry confidence falling by 13 index points to 123.

The Property Council’s ACT executive director Adina Cirson says the results may reflect foreshadowed cuts to the federal public service. Cirson calls for a larger injection of infrastructure investment from the federal government. “Canberra’s growth has been just as significant as that experienced in our major capitals but has been mostly overlooked by the Commonwealth.”


The ANZ/Property Council Survey has tracked industry sentiment since 2011. Visit the Property Council’s Data Room or learn more about the ANZ/Property Council Survey and our Support Sponsor RCP.

Congratulations to Karen Emms from Canberra Airport, winner of this quarter’s ANZ/Property Council Survey competition, who takes home a $500 Apple voucher.