The property industry in Australia is set to benefit from continued growth in construction activity and jobs, a new survey says.
Despite some mixed levels of confidence across different parts of the industry, participants in the latest ANZ/Property Council of Australia Property Industry Confidence Survey indicated they intend to ramp up new building activity and hire more staff over the next 12 months.
Overall, confidence levels indicated by the survey rose by four points to 135 as improving sentiment in New South Wales, Queensland and Victoria offset falls in Western Australia, Tasmania and the Northern Territory.
Survey respondents were particularly optimistic about forward work schedules with a solid majority expecting to ramp up work across all states and sectors and a strong majority across all states except Tasmania indicating they would increase headcount.
The latest results come amid a cyclical ramp-up in housing construction, which saw national housing starts hit sky-high levels of more than 180,000 during 2013/14 and have propelled overall levels of employment within the building industry to record levels.
While many believe home building activity has reached its cyclical peak, industry economists are reasonably confident an increase in commercial building and new infrastructure projects should help the volume of work remain reasonably strong in the near term future going forward.
Noting that sentiment regarding workflow and employment was reasonably buoyant even in states where overall confidence had dropped back, Property Council of Australia chief executive officer Ken Morrison said the results boded well for the broader economy, and called on governments at all levels to support the industry’s potential to contribute to economic prosperity.
ANZ chief economist Warren Hogan said while the housing market will continue to outperform, a more positive outlook for commercial property was being underpinned by a combination of low interest rates, improving corporate profit growth and a pick-up in capital investment intentions.
Going forward, Hogan said strong population growth and foreign investor interest in new housing should underpin buoyant residential construction conditions for some time yet whilst strong foreign demand for Australian property assets would support investor interest in commercial property over the immediate future despite challenges associated with the likelihood of increases in interest rates.
- The Property Council of Australia Property Industry Confidence Index rose four points in the December quarter to come in at 135 – well above the 100 mark separating optimism over the next 12 months as against pessimism
- Confidence was highest in New South Wales, Queensland and Victoria
- Increasing volumes of construction activity are expected across all states and sectors
- Employment is expected to rise in every state except for Tasmania
- 12-month expectations regarding residential, retail, retirement living and accommodation capital values are strong