Industry confidence moderates as housing and retail sectors cool

Industry confidence moderates as housing and retail sectors coolWhile industry confidence has dipped slightly as the housing and retail sectors cool, overall sentiment remains strong according to the latest ANZ/Property Council Survey.The quarterly litmus test of the industry reveals that nationwide confidence has fallen from 135 to 132. A score of 100 is considered neutral.More than 1,700 property industry professionals across all Australian states and territories were polled on their forward-looking views regarding the business and political environment, the economy, employment intentions and other factors. Glenn Byres, the Property Council’s chief of policy and housing says while national confidence remains “elevated”, it is not “overly optimistic” about the economy.ANZ economist Daniel Gradwell says the survey results suggest a softening outlook for the housing market, and that tighter macroprudential regulation is “having a negative impact on the industry”.The survey also saw big falls in expectations for retail capital growth for the September quarter.Byres says this reflects a heightened media focus on the “Amazon effect”, and recognises the “continued pressure on disposable incomes across Australia”.Byres says falls in confidence in New South Wales and Victoria are “red flags”.While it still leads the nation, New South Wales experienced the largest drop in confidence, falling six points to 139 for the September 2017 quarter.Jane Fitzgerald, the Property Council’s executive director in New South Wales, says the survey residential sentiment continues to soften, which “means we need the state government to take action to strengthen the housing supply pipeline in NSW”.In Victoria, sentiment dropped from a high of 140 last quarter to 135 this quarter.Sally Capp, the Property Council’s executive director Sally Capp said the fall in sentiment was a reminder of the need for government and business to work together to create the right economic environment to attract investment.Capp says, the Property Council continues to work with the State Government on planning and populations growth management issues to reduce costs, increase jobs and support stronger communities. In Queensland, confidence rose by one index point to 128, the only state to record a rise. The Property Council’s Chris Mountford attributes this to infrastructure commitments and positive announcements in the state budget, such as the extension of the first home owners grant.”But unexpected deviations in government policy, such as the new land tax surcharge on absentee owners, have a real impact on investment confidence and ultimately threaten job creating project opportunities,” Mountford warns.Confidence has fallen in the ACT, from 142 to 138 over the quarter. Adina Cirson says the results send some “mixed signals”. While ACT performs better than any other jurisdiction other than NSW, “forward work schedule expectations have dampened this quarter”.South Australia’s property industry is “treading water”, says Property Council executive director Daniel Gannon, after confidence remained steady at 133. Confidence remains on par with the national average, but Gannon is quick to point out that the survey was undertaken in the leadup to the state budget. He says the impact of two new taxes are “not yet known”.Over in Western Australia, confidence dropped four index points to 114 in the September 2017 quarter, following a 20-point climb to its highest level since 2013 in the previous quarter.”There is no doubt that a recovery in the WA property industry is underway but it is patchy and there will be ups and downs in sales and price expectations for a little longer,” says Lino Iacomella, the Property Council’s executive director in WA.Nationally, forward work schedules and staffing levels remain positive, while confidence in the federal government remains negative but improving.”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,” Byres concludes.Find out more about the ANZ/Property Council Survey and supporting sponsor RCP.