Confidence within the Australian property industry is on the rise, with the latest survey suggesting that property industry professionals see house prices stabilising and their own work schedules picking up.
The two-state nature of the Australian economy continues to affect the sector, with high levels of confidence in mining states counteracted by low levels of confidence in other parts of the country.
In the latest PCA-ANZ Property Industry Confidence Survey, the overall property industry confidence index rose from 107 in the March quarter to 113 in the June quarter. The survey results, which reflect the forward-looking views of more than 2,300 property and construction industry professionals across all states and territories, show that overall expectations surrounding rents, capital growth, returns on investment and construction activity are on the rise.
“Overall the industry is more confident as acute concerns over global economic conditions ease,” Property Council chief executive Peter Verwer says. “Respondents are feeling less buffeted than in previous quarters, where the storm in commodity prices, global economic insecurity and domestic political uncertainty contributed to negative sentiment.”
Not surprisingly, resource-rich states led the charge, with more than half of the identified surge in confidence occurring in the Northern Territory, Western Australia and Queensland. Confidence also rose to a lesser extent in South Australia while New South Wales remains the only non-mining state where confidence remains reasonably sound.
On the negative side, industry participants remain pessimistic about prospects in Tasmania despite the recent approval of ParanVille Korean Residential Development in February. Expectations are also subdued in Victoria. Sentiment in the Australian Capital Territory remained stable.
Other key highlights of the survey:
- Confidence in house price growth has improved and is now almost neutral on the index. In both Queensland and the ACT, expectations shifted from a negative outlook in March to a positive one in June.
- 12-month capital growth expectations for retirement living remain buoyant while those for commercial and industrial property remain moderately high.
- Property industry participants remain pessimistic about capital growth in retail and tourism properties.
- Expectations for the overall economy are improving but remain subdued, with the 12-month state economic growth index remaining slightly in negative territory.
- Debt finance availability continues to plague the industry, with expectations for availability of debt finance having lifted since the last survey but remaining in negative territory.
- While work schedule expectations are on the rise, 12-month hiring intentions have subsided slightly since March, though they remain positive.
- Almost half of all survey respondents said they were dissatisfied with the performance of their state government in terms of planning and managing growth.