mACRO PRESSURES DAMPEN CONFIDENCE IN THE PROPERTY INDUSTRY, BUT SENTIMENT REMAINS POSITIVE
Macroeconomic factors have weighed on confidence within Australia’s property industry although sentiment remains in positive territory, according to the latest ANZ/Property Council survey.
The December 2022 survey found the overall Confidence Index dropped 6 points nationally in the quarter yet remained positive at 113 index points, below the long-term average of 123 index points. A score of 100 in the Confidence Index is considered neutral.
Property Council of Australia Chief Executive Ken Morrison said the industry remained broadly optimistic, despite trepidation in confidence driven by external factors.
“These results are not surprising, but they do show that higher interest rates and concerns about the economy are beginning to impact confidence in this industry which employs more than 1.4 million people,” Mr Morrison said.
ANZ Senior Economist Felicity Emmett said sentiment is facing a trifecta of higher interest rates, rising costs and reduced access to finance. “Firms remain more upbeat about their own prospects than the broader outlook, but their optimism is beginning to fade. Sentiment around hiring intentions and the activity pipeline remain elevated but are trending lower, ‘’ Ms Emmett said.
The survey found the COVID-19 pandemic is expected to cause the greatest impact to the commercial office sector, followed by the hotels, tourism and leisure sectors.