Confident outlook for property persists in 2016  

The latest ANZ Property Council Survey, released last week, revealed that while the industry expects lower housing construction levels in 2016, confidence about the national economy is stronger.

“Property will still be a growth driver for the economy in 2016, even with an expected easing of housing construction levels,” said Property Council of Australia chief executive Ken Morrison.

“Industry confidence levels remain strong, forward work levels and staffing expectations are positive, and the industry expects non-residential construction to improve.

“Overall industry confidence edged up one point to 131 in the last quarter, with only NSW and ACT easing slightly and WA dropping again. WA is the only state with confidence in negative territory.

“In the first survey since the federal leadership change, expectations of national economic growth leapt in every state.

“This is a positive sign for the Turnbull government’s focus on tax reform, innovation and cities, but the industry will expect results in 2016.

“A policy reform agenda that can strengthen the property industry’s ability to expand, employ and invest would help strengthen Australia’s economic performance.”

ANZ Chief Economist, Warren Hogan, said a number of factors that drove Australia’s growth through 2015 will wane in 2016.

“We expect that the housing sector’s contribution to growth is set to ease, through softer construction activity and a reduced ‘wealth effect’ from weaker price growth,” Hogan said.

“The housing market has clearly eased through the second half of 2015. Triggered by the impact of tighter mortgage lending regulation for investors and higher mortgage lending rates, housing market sentiment has weakened sharply.

“The pipeline of commercial property construction, however, is gradually growing.

“Capital growth has strengthened across most commercial property sectors, with the expectations of capital growth strongest in retail and tourist accommodation property”.

For more information on the ANZ Property Council Survey click here.