The Australian property sector is expecting a bright and prosperous period over the next twelve months, with the latest survey of around 2,300 managers and professionals from across the sector showing buoyant expectations regarding capital values, forward work schedules and employment.
In the September quarter, the Property Council of Australia/ANZ Property Industry Confidence Index contracted marginally to come in at 131 points (see chart) but remained well above the 100 point mark separating buoyant expectations from negative sentiment.
Whilst New South Wales led the way followed by Queensland and encouragingly, Tasmania, net expectations were positive across all states and territories.
Furthermore, despite relatively subdued sentiment regarding prospects for the overall economy, respondents to the survey were confident about the outlook regarding construction activity as well as their forward work schedules and staffing levels, expecting all to increase significantly over the next twelve months.
Respondents also expect healthy levels of capital growth in residential property as well as in most commercial property sectors including retirement living, retail, industrial and hotels, with office being the only sector in which values are expected to decline (and even then only marginally).
Property Council of Australia Chief Executive Officer Glenn Byres acknowledged sentiment levels had eased in recent months but says the industry remains confident about its future notwithstanding the modest expectations surrounding the overall economy.
“After reaching a record high of 140 points at the start of 2014, property industry confidence has moderated amid concerns around the trajectory of economic growth and the fate of the Federal Government’s budget in the Senate” Byres said.
“However, the property industry remains confident about its own future, with strong prospects for construction activity across Australia.”
ANZ Chief Economist Warren Hogan said the overall economy was set for moderate levels of growth as low interest rates and a stabilisation of the labour market underpinned a modest improvement in the household sector and stronger lending conditions and economic growth augured reasonably well for business investment.
- The Property Council of Australia/ANZ Property Industry Confidence Index contracted 1 point during the September quarter to come in at 131 but remained well above the 100.0 level separating improving property conditions from deteriorating conditions
- Confidence remained buoyant with respect to construction activity, forward work expectations and staffing levels
- Capital growth expectations were highest in the residential and retirement living sectors and moderately high in the retail, hotel and industrial sectors; survey participants expected modest declines in values of office property.