Residential capital growth and foreign investment drive property in 2015

Business sentiment for the Victorian property sector has risen slightly in the September 2015 quarter.

The latest ANZ/Property Council Survey shows Victorian respondents’ sentiment increased from 131 on the index for the June 2015 quarter to 134 for the September 2015 quarter.

The total index score for Australia was steady at 131 for the September quarter. A score of 100 is considered neutral.

The survey is the largest national business confidence survey and polled almost 1,800 professionals from the property and construction industry nationally, for their forward-looking views.

Property Council Victorian Executive Director, Jennifer Cunich, said the current upswing in residential construction activity and the strong degree of foreign investment in Victoria was lifting the industry’s outlook.

“Despite 2015 being a year framed by an unstable international outlook, strong local conditions were helping keep the industry positive,” said Ms Cunich.

“Residential capital growth expectations remain strong at 32 points, a 2-point drop since last quarter. This is being driven by a strong domestic desire for more residential property across metropolitan and regional Victoria.

“Foreign property investors are also helping lift industry buoyancy by playing an active part in the local market. 31, 22, 16 and 13 per cent of property sales in the residential, commercial, retail and industrial sectors have been to foreign (non-Australian resident) buyers.

“Strong foreign investment in the broader property industry is helping offset a weaker local market by generating construction activity, tax revenue and job creation.

“The property industry is Victoria’s largest employer and the third biggest contributor to Gross State Product.

“While the property industry is optimistic about its future, many operators are growing concerned about the State Government’s worsening property tax addiction. Despite promising not to introduce or increase taxes during this term, the Government has broken its word twice.

“No tax increase ever resulted in faster business expansion, greater private investment or higher job creation. If Victoria is to be the best state to invest, manage and own property, the state’s taxation policies will need to be revisited.”

 

Fast Facts:

• Victorian index score: increased from 131 in the June 2015 quarter to 134 for the September 2015 quarter;
• Residential capital growth score: remain strong at 32 points in the September 2015 quarter; and
• Foreign investment: Responders in the residential, commercial, retail and industrial sectors reported between 13 and 31 per cent of their property sales were made to foreign (non-Australian resident) buyers.

 

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edia contact: Asher Judah | M 0499 841 715 | E [email protected]