Property industry remains confident
Property industry confidence remains high despite concerns about the nation’s economic growth prospects, according to the latest Property Council/ANZ Property Industry Confidence Survey.
The report for the September 2014 quarter shows confidence in the property industry remained steady at 131 points, compared to 132 for the previous quarter.
ANZ chief economist Warren Hogan said the index shows the underlying outlook for the Australian economy is positive, supported by likely improved business conditions, solid business lending and stronger global economic growth. However, it also reveals the impact on sentiment from buffeting to the Australian economy by slower retail sales, softer building approvals and weaker momentum in job advertisements.
“Despite these recent headwinds, the outlook for the household sector and household consumption is expected to improve moderately in the year ahead, supported by low interest rates, a more stable labour market outlook, and a likely improvement in consumer confidence,” Hogan said.
“Hence, despite a solid recovery in the property sector, ANZ expects that Australia will experience a period of moderate growth in the near term.
“For monetary policy, this suggests we are in for an extended period of low interest rates before the RBA likely enters a period of rate hikes in 2015 with the aim of returning monetary policy closer to a neutral setting.”
Confidence has declined from the record high of 140 points at the start of 2014, moderated by concerns about the potential for economic growth and the fate of the Budget in the Senate, said Property Council acting chief executive Glenn Byres.
The Property Council/ANZ Property Industry Confidence Survey is based on a survey of 2300 property industry respondents, including owners, developers, agents, managers, consultants and government, across all major industry sectors and regions. It was conducted in June this year for the September 2014 quarter.
The index tracks changes in sentiment across property types and markets and identifies the determinants of industry confidence.
The latest results show the retail, industrial and retirement sectors have strong forward work plans and steady capital growth expectations for the next 12 months.
However, there are signs the brakes are beginning to be applied to the residential property segment.
“While construction activity in the residential sector is slated to remain high, we are seeing some slowing of the housing construction boom and an easing of the growth in housing prices,” Byres said.
Byres said while index respondents were confident in their own industry, the report reveals expectations for the future of Australia’s economy are down.
“The outlook for the nation’s economic growth has slipped from the highs recorded following last year’s election. However, the property industry remains confident that it will continue to underpin Australia’s economy,” Byres said.
“The onus is on governments to release realistic economic growth plans and micro-economic reform strategies that will support construction activity across Australia.”