Property industry confidence is improving, but cautiously, according to the latest ANZ/Property Council survey.
The national confidence index for the December 2020 quarter increased by six index points, to 82 – still well below the neutral score of 100, and the historical average of 123.
However, the outlook for December 2020 represents a 20 index point improvement on June 2020 when sentiment had dropped to its lowest level in the history of the survey.
Most markets surveyed reported improvements in sentiment, with West Australia returning to positive sentiment with a 25-point index point jump, followed by South Australia (98), New South Wales (84), the ACT (81), Queensland (79) and Victoria (64).
Overall, national expectations for forward work schedules and staffing levels remain negative.
Expectations for industrial and residential were both positive. Residential construction sentiment improved for the second consecutive quarter, supported by stimulus measures such as the federal government’s HomeBuilder program, as well as state and territory government support for new and first home buyers.
Three quarters of developers operating in the residential sector said HomeBuilder would have a positive impact on their businesses over the next quarter.
Property Council chief executive Ken Morrison said schemes such as HomeBuilder were providing a much-needed boost for the property industry at a critical time.
“HomeBuilder is the pop star of government stimulus measures released so far – highly effective, immediate and good value for money,” Morrison says.
“The challenge will be maintaining this momentum beyond December when the current scheme expires and household income supports such as JobSeeker and JobKeeper are wound back further.
“All levels of government will need to step in with incentives that will deliver fast and effective stimulus to build momentum for recovery.”
This sentiment was shared by ANZ senior economist, Felicity Emmett.
“HomeBuilder, along with other state government initiatives, is clearly giving the housing construction sector a boost, although with population growth dropping sharply and the rental market under pressure, headwinds remain for the housing sector.
“While sentiment is very weak, government support has clearly helped to prevent the worst.
“Looking ahead, the recent federal budget should build confidence both in the property sector and more broadly, although the outlook remains extremely challenging and further stimulus may be required over coming months,” Emmett says.
According to data released by the Assistant Treasurer, Michael Sukkar, state and territory revenue offices responsible for administering the HomeBuilder grant had received 11,367 grant applications as of 9 October.
This included 1,517 new build applications in NSW; 3,364 in Victoria; 2,070 in Queensland; 432 in WA; 800 in SA; 398 in Tasmania; 276 in the ACT; and 27 in the NT. There had also been 2,483 applications for rebuilds under the scheme. (WA only accepts applications once the first construction milestone is achieved, whereas other states and territories accept applications on the signing of sales or building contracts.)
According to data from the Housing Industry Association, new home sales have risen by 50 per cent in the four months since HomeBuilder was announced, compared to the four months prior to June 2020.
New home sales have been higher in each month since HomeBuilder was announced than any month in the past two years.