Property industry confidence resilient to disruptions
Property industry confidence levels have fallen over the last quarter, but staffing and forward work expectations have remained resilient despite widespread lockdowns.
The September quarter results of the ANZ / Property Council Survey have found that national industry confidence was at 130 points, down 9 index points from June 2021. A score of 100 is considered neutral.
The results are considerably higher than levels recorded in at the same time last year, when national industry confidence was at a historically low 82 index points.
Property Council Chief Executive, Ken Morrison, said the property sector has been affected by ongoing lockdowns but is well poised to lead Australia’s economic recovery.
“Given the level of disruption the industry has faced over the last quarter, this is a remarkably resilient result that remains above the historic average,” Mr Morrison said.
“The property industry clearly has faith in Australia’s capacity to rebound and recover.”
“As we transition through the stages of the National Plan, industry confidence will be strengthened by clarity and consistency in government policies as we reactivate our major cities.”
The survey has found that expectations of forward work, staffing levels and economic growth are all down from the previous quarter.
57 per cent of respondents believed that the pandemic will have less of an impact on their business operations over the next three months.
ANZ Senior Economist, Felicity Emmett, commented: “While lockdowns have clearly impacted confidence, particularly in the hotel/tourism and office sectors, the overall outlook remains surprisingly positive in the face of the extended lockdowns in NSW and Victoria.”
“Expectations of a solid economic rebound are underpinning sentiment, helped by a large pipeline of residential construction and strong gains in house prices.”
- National confidence levels decreased by 9 index points to 130 in the September 2021 quarter.
- National forward work schedule expectations decreased from 48 to 39 index points over the September 2021 quarter. SA was the only market not to record a decrease, with an increase of 9 index points from the previous quarter.
- National staffing level expectations decreased by 1 index point over the September 2021 quarter. WA and SA were the only markets to record increases in staffing level expectations
- National economic growth expectations decreased by 21 index points to 13 over the September 2021 quarter.
- At a national level, 57% of respondents believe the impacts of the coronavirus outbreak on their business will improve over the next 3 months, 31% of respondents believe there will be no change and 12% of respondents believe the impacts will get worse.
- 66% of respondents believed the Hotels, Tourism and Leisure sector will continue to be the most severely impacted by the Coronavirus outbreak over the next 3 months. This is followed by commercial office (18%) and then shopping centres (12%).
- The majority of respondents from all markets believe interest rates with either remain the same or slightly increase over the next 12 months.
- Respondents from most markets had a slight reduction in expectations for the price growth of housing over the next 12 months, when compared to the previous quarter. Expectations for the price of housing increased slightly for respondents from QLD.
- Australian office capital growth expectations decreased by 7 index points to -17 over the September 2021 quarter. All markets except WA recorded reduced expectations over the quarter.
- National capital growth expectations for the industrial sector over the next 12 months decreased by 2 index points to 34 index points.
- National capital growth expectations for the retail sector decreased by 3 index points to -14 index points over the September 2021 quarter. All markets recorded reduced expectations over the quarter.
- Australian retirement living capital growth expectations increased by 4 index points to 26 over the September 2021 quarter. Respondents from all markets had higher sentiment compared to the previous quarter.
- Sentiment for Australian hotel capital growth expectations decreased by 1 index point over the September 2021 quarter, and remains in negative territory at -20 index points.
- Confidence in the Federal Government’s role in delivering policies that encourage jobs and economic growth has decreased by 20 index points over the quarter. Over the September 2021 quarter, national sentiment decreased from 33 to 12 index points.
- Respondents in all markets believe their respective state governments are doing a good job planning and managing growth, with the exception of VIC, ACT and QLD.
- Prime cap rates are expected to decrease over the next 12 months in all markets.
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: Richard Lindsay | M 0422 022 746 | E [email protected]