News

Economic growth concerns weigh on industry confidence

ECONOMY • October 2, 2019

Property industry sentiment across Australia has retreated from its post-federal election bounce to below the historical average according to the latest ANZ/Property Council Survey for the December 2019 quarter.

Sentiment has fallen by 10 index points from the previous quarter to 118 which is below the historical average of 126 since the survey’s inception in 2011. A score of 100 is considered neutral.

Highlights from the latest ANZ/Property Council Survey are below:

 
 
  • The national confidence index fell by 10 index points for the quarter to 118 points; it’s second-largest quarterly decline since the survey’s inception and below the historical average of 126.

 

  • Confidence declined across all markets and most significantly in South Australia which fell by 43 index points, the biggest quarterly fall of any state or territory in the survey’s history. SA has gone from the highest confidence rating in the country to the lowest, in just one quarter.

 

  • National forward work expectations have moderated slightly by five index points, with declines across all state markets, except for the ACT which recorded a 38 index point increase. Expectations have decreased significantly in South Australia. Similarly, staffing level expectations have also fallen by four index points this quarter to its lowest level in over six years and below the historical average.

 

  • National economic growth expectations have dropped by 18 index points into negative territory of -14. (The June quarter GDP result was announced during the survey period.) Respondents in SA, NSW and Queensland expected slower economic growth for their states over the next 12 months.

 

  • Respondents from all states and territories expect another cut to interest rates in the next 12 months and maintained expectations around debt finance becoming more accessible over the next 12 months (except SA).

 

  • For the first time in 18 months, respondents expected residential prices to increase over the next 12 months, with Victoria, NSW, Queensland and the ACT recording the largest turn-around in sentiment.

  • Construction activity expectations have decreased in all sectors tracked over the December 2019 quarter, except for residential although it remains in negative territory.

 

  • Sentiment towards the Federal Government soared in the previous quarter but has moderated significantly in the December 2019 quarter, falling from 18 to six index points. Sentiment in Victoria was marginally negative. 30 per cent of survey respondents identified cities and infrastructure delivery as the most important issue for the Federal Government, followed by housing supply and affordability (17 per cent); energy, environment and emissions (15 per cent); economic management (14 per cent), tax reform (13 per cent) and planned population growth (11 per cent).

 

  • Overall sentiment towards state and territory governments has dipped into negative territory, led by strongly negative sentiment in SA and Queensland. Sentiment in SA has plunged by 48 index points, from 20 to negative 27 in one quarter. Overall, property taxes and charges was the most critical issue industry would like to see addressed by state and territory governments (23 per cent) followed by planning regulation and reform (21 per cent).

Background:

The ANZ/Property Council Survey commenced in 2011. It is now one of Australia’s largest surveys of sentiment in the property industry – our largest industry and employer which supports 1.4 million jobs.

Respondents are drawn from across the property industry, including property developers, managers and agents and service providers.The survey was conducted between 3-18 September and included 1,068 respondents.

 

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