STIMULUS SUPPORTS PROPERTY INDUSTRY CONFIDENCE LIFT
Property industry confidence is gradually picking up, albeit very cautiously, according to the ANZ/Property Council Survey for the December 2020 quarter.
Stimulus measures such as the HomeBuilder grant as well as support from state and territory governments for new and first home buyers are driving up sentiment for the residential construction sector.
The ANZ/Property Council Survey national confidence score for the December 2020 quarter increased by 6 index points to 82 – still well below a neutral score of 100 and the survey historical average of 123.
Property Council of Australia chief executive, Ken Morrison, said stimulus measures such as HomeBuilder were providing a much needed boost for the property industry at a critical time.
“As the scheme has become available in all states and territories we have seen a big lift in sentiment among those in residential development.
“HomeBuilder is the pop star of government stimulus measures released so far – highly effective, immediate and good value for money.
“The challenge will be maintaining this momentum beyond December when the current scheme expires and we are looking at a huge drop in population growth due to closed borders,” Mr Morrison said.
Mr Morrison said there was still a long way to go before property industry sentiment returned to its pre-COVID levels.
“Government stimulus measures will be essential to helping our industry drive economic recovery.
“As household income supports such as JobSeeker and JobKeeper are wound back over the next few months, all levels of government will need to step in with incentives that will deliver fast and effective stimulus to build momentum for recovery,” Mr Morrison said.
The December quarter result followed a 14 index point improvement in the September quarter after confidence levels dipped to their lowest level in the survey’s history in the June 2020 quarter.
The majority of markets surveyed reported an improvement in sentiment, with Western Australia recording a 25 index point jump to return to positive territory and lead the country at 107, followed by South Australia (98), New South Wales (84), the ACT (81), Queensland (79) and Victoria (64).
Overall, national expectations around forward work schedules and staffing levels remain negative, although WA and SA recorded slightly positive staffing level expectations.
75 per cent of developers operating in the residential sector said they expected the Federal Government’s HomeBuilder scheme would have a positive impact for their business over the next quarter, up from 68 per cent in the previous survey.
After dipping in the June 2020 survey, residential construction expectations for the next 12 months have remained in positive territory at 9 index points.
Industrial construction expectations continue their upward trend and lead the survey at 34 index points. Retail construction has the most negative outlook at -22 index points, followed by hotels at -18 index points and the office sector at -14 index points.
ANZ Senior Economist Felicity Emmett commented: “Property sentiment has improved a little but remains depressed in the wake of COVID-19 and the associated restrictions put in place by the federal and state governments to limit its spread.
“The impact remains widespread across states and sectors, with sentiment in the tourism, office and retail sectors still extremely weak. In contrast, the industrial property sector has strengthened alongside the acceleration in e- commerce.
“While sentiment in the housing sector remains negative, it is clearly improving.The residential construction outlook is a highlight, helped by the federal government’s HomeBuilder program.
“The scheme, along with other state government initiatives, is clearly giving the housing construction sector a boost, although with population growth dropping sharply and the rental market under pressure, headwinds remain for the housing sector.
“While sentiment is very weak, government support has clearly helped to prevent the worst. HomeBuilder, JobKeeper and the raft of other government stimulus measures are helping to underpin sentiment.
“Looking ahead, the recent federal budget should build confidence both in the property sector and more broadly, although the outlook remains extremely challenging and further stimulus may be required over coming months.”
There were 857 respondents to the online survey between 7-23 September 2020.
To view select ANZ/Property Council Survey historical data series, visit the Property Council’s Data Room
To find out more about the ANZ/Property Council Survey and our Supporting Sponsor RCP, visit: www.propertycouncil.com.au/confidence
Media contact: Matt Francis m 0467 777 220 e [email protected]