A new report indicates that confidence in Australia's property sector has risen, with gains particularly pronounced in the states of New South Wales and Queensland.
The Property Council/ANZ Property Industry Confidence Index to December 2013 indicates that the confidence of the nation’s property industry has logged a 30 point year-on-year gain.
Gains in confidence were especially strong in New South Wales and Queensland, serving to significantly buoy the nationwide outlook.
“Positive expectations about house price growth and significant expected increases in construction activity in New South Wales and Queensland are driving a strong upturn in confidence for the property industry,” said Nathan Paine, chief operating officer of the Property Council of Australia.
Victoria also saw gains in confidence for the year ahead, overcoming a prior bout of jitters in the sector.
The increased optimism enjoyed by property sectors of eastern coast states stands in contrast to waning confidence on the other side of the country.
“While NSW and Queensland are looking at a brighter future, confidence in Western Australia has eased from very high levels on the back of the end of the resources boom,” Paine said.
Paine pointed out, however, that expectations regarding Western Australia’s economic growth remain robust.
The Australian Capital Territory is home to the most pessimistic property market as a result of concerns about retrenchments in the public service following the Coalition’s Federal election win.
The ACT property sector remains alone in responding adversely to Abbott’s victory, however, with Paine saying the post-election poll indicates that the Coalition’s assumption of office has been a major confidence booster.
“This poll captures the market response to a change of government and the increase in certainty and stability from the federal government,” he said. “There is no doubt the property industry is looking to the decisive election result to dispel the uncertainty overshadowing Australia’s political and investment landscape.”
Low interest rates remain another major factor in the sector’s optimism, with the survey indicating that members of the sector expect record low interest rates to continue.
Other factors include the vigorous rebound in activity on the housing market, and strong demand from offshore investors, particularly from China, where the cash-flush nouveau riche are eager to diversify abroad as a result of local restrictions on property purchases.