Property industry confident despite price falls
Western Australia has seen the biggest boost in confidence, while New South Wales has lagged behind.
While the latest ANZ Property Council Survey found that nationwide confidence fell slightly for the quarter, nationwide confidence in the property industry remains high. The survey, which polls property industry professionals, registered a 139 for the March 2018 quarter. Any score above 100 is considered confident.
“While we are slightly off the peak of the December quarter, we see continued strong confidence across all jurisdictions and the tightest state convergence in the survey’s history”, Property Council chief executive Ken Morrison said.
Confidence levels rose across all states and territories, with the exception of New South Wales and the ACT. Western Australia saw the most dramatic result, with a 42 point rise in confidence over the year. The boost in confidence comes in spite of a 0.5% decline in capital city home values last quarter.
“There are a number of factors behind this improvement. The decline in the mining sector is past the worst, and in 12 months’ time will most likely be entirely behind us. We are slowly seeing an increase in activity outside of the mining sector, with an increase in construction in the tourism sector in particular. The upshot is that survey respondents’ views on Western Australia’s economic growth prospects, over the next 12 months, are the strongest on record,” ANZ senior economist Daniel Gradwell said.
But Gradwell cautioned against “getting too carried away” with WA’s reversal in sentiment.
“Parts of the state will still suffer as the remaining mining investment projects wind up, and these regions are likely to see further job losses. Further, the improvement in sentiment is only useful if it translates into actual activity. The early signs are encouraging, but there is still a long way to go.”
WA’s rise in confidence put it on par with New South Wales, where confidence has begun to slip, Morrison said.
“NSW was the most confident state for 15 consecutive quarters, but it has now been bested by Victoria, which leads the nation in confidence, staffing level expectations and forward work schedule expectations,” Morrison said.