- Property industry confidence levels maintained around previous record highs in the latest ANZ/Property Council Survey, but affordability concerns are increasing
- For the second quarter in a row, housing supply and affordability topped the key problems lists, according to the survey of 874 respondents before the most recent lockdowns
- A 78 per cent of firms operating in the residential sector now expect price gains over the next year with 30 per cent of respondents expect interest rate rises over the next 12 months
- The Property Council’s latest office occupancy survey showed activity fluctuated between weekly peaks and troughs
In fresh data obtained prior to the latest outbreaks, property industry confidence levels maintained around previous record highs, but affordability concerns are increasing.
The results of the latest quarterly ANZ/Property Council Survey found that national industry confidence was at 139 points, the third-highest level since the survey began, with a score of 100 considered neutral.
For the second quarter in a row, housing supply and affordability topped the key problems lists, according to the survey of 874 respondents.
Seventy-eight per cent of firms operating in the residential sector now expects price gains over the next year; while on the construction front a net balance of 52 per cent expect construction to expand over the coming year.
An increasing number of firms now expect higher interest rates over the next 12 months. In the latest survey, 30 per cent of respondents expect interest rate rises, up from 15 per cent in the March survey.
Australian office capital growth expectations increased over the June 2021 quarter but remains in negative territory at -10 index points.
The Property Council’s latest office occupancy survey showed activity fluctuated between weekly peaks and troughs, with office occupancy on the quietest day of the week is on average only 58 per cent of the occupancy achieved on the busiest day.
Property Council Group executive of policy & advocacy Mike Zorbas said the property sector was doing the heavy lifting to drive Australia’s economic recovery.
“As Australia emerges from the current lockdowns, the property sector will again be essential to our economic prospects,” he said.
“Policymakers need to be looking at new ways to stimulate housing supply, our capacity to supply apartments in coming years and to support new job-creating opportunities.
“The survey results have found that housing supply and affordability have solidified as the key area that industry participants want the Federal and State governments to focus on for recovery.”
Mr Zorbas said confidence remained high since the May 2021 Federal Budget’s national growth and job predictions were better than expectations in prior quarters, but he cautioned about home affordability.
“Poor supply is the enemy of housing affordability. We need to be investing in the right infrastructure, fixing housing affordability, reforming archaic planning systems, phasing out stamp duty, getting zoning right and investing in social housing,” he said.
“As a country we need to find more effective ways to make planning systems efficient and we encourage National Cabinet to consider National Competition Policy style incentives to help make it happen.”
ANZ senior economist Felicity Emmett said the survey shows that confidence remains buoyant.
“A strong outlook for economic growth across the country, a very large pipeline of residential construction work and solid expectations for property prices are all supporting this confidence,” she said.
“While new COVID restrictions are concerning, previous brief lockdowns have shown how resilient the economy and labour market is, suggesting that the outlook for the property sector is likely to remain very positive.”
National capital growth expectations for the industrial sector over the next 12 months decreased by five index points to 36 index points, while 64 per cent of respondents believe hotels, tourism and leisure sector will continue to be the most impact by the pandemic.