ANZ/Property Council Survey: Growth and confidence moderates as housing and retail sectors cool

National confidence across the property sector has fallen according to the latest quarterly ANZ/Property Council Survey of over 1,700 industry professionals nationwide.

Nationwide confidence fell from 135 to 132 for the September 2017 quarter. A score of 100 is considered neutral.

“While national confidence is at elevated levels, the fall in confidence in our two biggest state economies of New South Wales and Victoria is a red flag that needs to be watched”, said Glenn Byres, Chief of Policy and Housing, Property Council of Australia.

“In part, we are seeing the impact of debt finance tightening as well as an expectation that capital growth in the housing market will flatline.

“While the industry is expecting a lift in staffing levels and continued strong forward work schedules, it is not overly optimistic about the national economy.

“While the survey reports an improvement in the perceived performance of the Federal Government, the industry has an expectation of little economic growth in the September quarter.”

Mr Byres said the retail sector was an area of major concern for the property industry.

“All jurisdictions are reporting a dramatic fall in expectations for retail capital growth.

“This goes beyond any anticipated Amazon effect. It is recognition of the continued pressure on disposable incomes across Australia, including escalating energy prices.”

Daniel Gradwell, Economist for ANZ Bank said the response of the survey respondents suggest that the outlook for the housing market is softening, with a variety of indicators pointing towards a weaker market going forward.

“The sector has already started to cool in recent months, with Sydney house price slowing to 12% y/y in May, from 20% y/y just two months earlier. Similarly, monthly building approvals have fallen around 15% from the peak a year ago. It is increasingly apparent that the tighter macroprudential regulation from APRA is having a negative impact on the industry.

“In turn, the additional regulation is resulting in an ongoing worsening of the availability of debt finance. While tighter funding conditions are being reported across all sectors of the property market, the impact has been most pronounced in the residential sector”, he said.

 

Media contact:  Paul Ritchie |E  pritchie@propertycouncil.com.au

To find out more about the ANZ/Property Council Survey and our Supporting Sponsor RCP, visit www.propertycouncil.com.au/confidence