Confidence in Australia’s property sector has rebounded and is now at record near-record levels, the latest survey has found.
Releasing the results of its survey of 830 real-estate and property professionals conducted in conjunction with ANZ, the Property Council of Australia said its Property Industry Confidence Index soared to 142 points in the June quarter.
This is the second highest level recorded since the survey began in 2011.
At this level, confidence is more than 80 points higher compared with its depths during the peak of COVID and is well above the 100.0 mark which separates overall optimism from pessimism.
Confidence has lifted in terms of forward work schedules, staffing, economic growth, capital growth and debt finance availability.
Further, survey participants expect that the effect of COVID-19 on their business will continue to wane.
Across the various states/territories, between 51 percent and 77 percent of respondents believe that COVID’s impact on their business will improve over the next three months.
By contrast, only between one and seven percent expect the COVID effect on their business to intensify.
The survey comes amid growing confidence in the broader economy as unemployment (5.6 percent in March) falls and business and consumer confidence is back on the rise.
In its latest forecast, NAB said it expects the economy to expand by 3.7 percent in calendar 2021 following a 1.1 percent contraction in 2020.
Meanwhile, confidence in the residential sector is being driven by stronger activity associated with the HomeBuilder stimulus program whilst in commercial property there are growing signs of workers returning to offices.
Property Council of Australia chief executive, Ken Morrison, said the lift in confidence is being driven by expectations of recovery in the national economy.
“While the economy still faces significant challenges, the property industry is clearly buoyed by the speed of our turnaround and the strong demand they are seeing, particularly in the residential and industrial sectors,” Morrison said.
ANZ Senior Economist, Felicity Emmett said the rebound in confidence reflected several factors.
“Property sentiment has improved again, reflecting stellar economic performance, a large pipeline of work for the coming year and a strong outlook for property prices,” Emmet said.
“The combination of record low mortgage interest rates and targeted stimulus is clearly supporting the housing sector, where confidence is now at record levels. Price expectations are at all-time highs, while the HomeBuilder scheme, along with state and federal government initiatives, has brought forward a large chunk of demand. This has more than offset the impact from low population growth and elevated unemployment.”
“The impact of the pandemic continues to linger, though, and the outlook for the tourism sector remains clouded in an environment of repeated state border closures and delays to the vaccine rollout.”