Confidence in Australia’s property and construction industry has surged amid greater political certainty following last year’s election and growing confidence in the construction sector outlook, according to a survey of more than 2,600 respondents from within the property and construction industry across the nation has revealed.
Releasing the March 2014 Property Industry Confidence Survey, the Property Council of Australia and ANZ say the Property Industry Confidence Index jumped eight points from 132 in the December quarter last year to 140 in the latest survey (or 40 on a net balance basis) – 33 points above the same time last year and well above the 100 point level separating positive expectations from negative expectations.
Describing the results as ‘great news for the hundreds of thousands of Australians working in the property industry’, Property Council of Australia Chief Executive Officer Peter Verwer says the March quarter expectations see every Australian market in positive territory.
Verwer said confidence is being underpinned by more buoyant expectations about house price growth and significant increases in residential construction activity as well as strong increases in staffing levels, and went well beyond the return to a more stable government.
“This is more than a bounce due to political events – this is Australia’s largest industry powering back up after a long period of consolidation” Verwer said.
According to the survey, survey participants expect increases in capital values across all major asset classes in the next twelve months.
Over that timeframe, planned construction activity is expected to rise dramatically, with residential and retirement living being the strongest sectors.
Despite the positive results, however, ANZ Chief Economist Warren Hogan says the Australian economy will experience below trend growth in the near-term.
“A buoyant property sector is leading the broader economy out of the gloom that has prevailed in recent years bolstered by low interest rates and solid investor demand for both residential and commercial property” Hogan says.
“Outside the property sector, the improvement in business sentiment has been tentative and the near-term outlook for the Australian economy remains subdued. Mining investment is winding down from unsustainable highs and the public sector will likely detract from growth in the near-term.
“Hence, despite a solid recovery in the property sector, ANZ expects that Australia will experience below-trend growth over the next 12-18 months.”
Key survey findings:
- Property industry confidence across the country has jumped by 33 points from 107 in March 2013 to 140 in March 2014.
- Staffing levels are expected to increase, especially in New South Wales, Western Australia and Victoria.
- Queensland and New South Wales are expecting the highest levels of economic growth
- Capital growth is expected across all major property classes in the next twelve months
- Planned construction activity is on the rise across all major categories, especially in housing and retirement living.