Seizing opportunities in sensational times

Seizing opportunities in sensational timesWe are living in “sensational times”, says Craig James, CommSec’s Chief Economist – but only some of us will seize the opportunities within the current economic environment.Speaking at the Property Council of Australia’s 2015 Property Market Outlook Lunch at the Hotel Realm on Tuesday 10 March, James argued that we’ve been “hoodwinked” by global challenges and domestic politics into thinking our economy is soft.Instead, James argues that a softer Australian Dollar, plummeting petrol prices, low interest rates, inflation and unemployment, together with the emergence of new technologies, present an unparalleled opportunity for Canberra’s property industry.Dwelling starts in the ACT are currently tracking above long-term averages, James says, and while Sydney’s hot housing market grabs the headlines, Canberra’s respectable 3.6 per cent growth over the decade stacks up against Sydney’s 4.0 per cent growth over the same period.Interest rates are at their “lowest in a generation”, at 2.25 per cent, and James says “we need to go back to 19, when the variable rate was 3.88 per cent, to see better interest rates.”Of course it’s not all good news, as anyone in Canberra’ industry knows too well. After years of topping the table of state and territory economies, the ACT has recently fallen to sixth of eight economies. Building approvals down and unemployment trending upwards.However, James points out that the ACT’s 4.5 per cent unemployment rate means that 95.5% of people are working. “Businesses are hiring again and consumers are spending -although cautiously,” he says.James says we can expect some “slow down” in construction, but with levels of activity still high, it will be more an “easing of growth”. Pointing to a long list of local projects at their ‘early’ or ‘possible’ stages, James called on the audience to consider this a “list of opportunity”.With economists predicting Australia’s economic growth in 2015 would be between 2.75-3.25 per cent, or “broadly normal”, James asked “what are we lacking?”The answer, it seems, is confidence. We need “hard and fast decisions” from our governments to restore confidence and provide the conditions to enable our industry to flourish.Catherine Carter is ACT Executive Director of the Property Council of Australia.