The ANZ/Property Council survey for the June 2020 quarter has clear messages for policymakers as COVID-19 erodes property industry confidence.
The COVID-19 pandemic has caused the biggest drop in property industry confidence in the decade-long history of the ANZ/Property Council industry survey.
National industry confidence levels plunged by 61 index points from the previous quarter to an all-time low of 62 index points for the June 2020 quarter. A score of 100 on the index scale is considered neutral.
One-third of survey respondents said COVID-19 was already having a serious impact on their businesses, and more than half said they expected this to worsen in the next quarter.
National forward work schedules decreased from 36 to -22, and staffing level expectations decreased by 31 index points to -16 over the June 2020 quarter. All states and territories recorded negative expectations for the first time since the Survey’s inception in 2011.
Key indicators such as national staffing level and forward work expectations dropped into negative territory for the first time in the survey’s history. The federal government’s JobKeeper wage subsidy program was announced just before the survey period ended.
According to Property Council chief executive Ken Morrison, the survey findings are “real-time measures of confidence” that can’t be understated.
“Our survey was run through the last two weeks of March, offering a critical insight into the drivers of industry sentiment and decision-making as the response to the pandemic was starting to dig deep into business activity,” Morrison says.
Felicity Emmett, ANZ senior economist, says property sentiment has “taken a sharp hit” after recovering through much of 2019.
“Across all sectors, price expectations have turned around sharply, employment prospects have deteriorated and the construction outlook has turned down,” Emmett says.
“The construction sector is not subject to a shut-down at present, but the downturn in the outlook is concerning, and suggests that the impact of the virus may be more long lasting on the property sector. With long lags associated with construction approvals, commencements and completions, a quick rebound once the lockdown is eased seems unlikely.”
For more on the survey findings, including state and territory analysis, head over to the Property Council data room.