ANZ Property Council industry confidence survey June 2019 quarter

29 April 2019

A six-year low in property industry confidence levels underscores Treasury’s budget warnings about the risks to the economic outlook from a further deterioration in the housing sector.

The ANZ Property Council industry confidence index for the June 2019 quarter recorded its fourth consecutive quarterly decline and its lowest level since March 2013, falling by eight points to 115 index points. A score of 100 index points is considered neutral. Confidence levels were down in all states, except the ACT.

Over the past 12 months, industry sentiment has dropped by 28 index points, with the biggest falls in Victoria (-33), NSW (-32) and Queensland (-26). The ACT had the smallest decline during the period (-7) followed by SA (-11).

“This is a significant further drop in confidence in one of the big engines of the economy, just one week after Treasury flagged the risks of a declining housing sector in the budget papers,” said Ken Morrison, Chief Executive of the Property Council of Australia.

“The downturn in residential markets is driving this confidence slump, but we’re also seeing a less positive outlook across a number of important indicators, including expectations around national economic growth, construction and capital growth across some property types,” said Ken Morrison, Chief Executive of the Property Council of Australia.

“The key message for policy-makers is to keep a sharp focus on the property industry and be prepared to step up with a housing contingency plan if that’s what the economy needs.”

“It is certainly a bad time to be risking changes to policy settings such as negative gearing and capital gains tax which may lead to a further drop in confidence across the industry,” Mr Morrison said.

The ANZ Property Council Survey for the June 2019 quarter measured sentiment across the property industry, with responses from 1,184 people between 11-26 March. The survey is the largest of its kind for property and one of Australia’s largest surveys of business sentiment.

ANZ’s Head of Australian Economics, David Plank commented:

“The most important aspect of the latest ANZ-Property Council survey could be the improvement in the availability of finance. It was a modest improvement in this part of the survey in mid-2017 that signalled greater stability in the housing market later that year and in early 2018. Finance availability then deteriorated sharply, continuing to fall through the rest of 2018 and into 2019. We think this deterioration was the trigger for the renewed house price weakness in Sydney and Melbourne from that point. The turn in finance availability captured in this survey could signal a turn in the market. Certainly it suggests we may be the past the worst of the downturn in building approvals.

“We need to be cautious, though, about the outlook. Finance is still difficult to get, and sentiment in the residential property space is very negative. This primarily reflects the price outlook, which has fallen further in New South Wales and Victoria. Sentiment does tend to lead rather than follow prices, however, certainly over the past few years. We think the continued downturn in price sentiment reflects recent developments rather than indicating a deterioration in the outlook. The shift in expectations with regard to interest rates may help the outlook. Still, we expect further declines in house prices this year.

“Outside residential, sentiment is much better. It has, however, declined from its recent peak across most sectors. Sentiment in the retail sector is especially soft, which is not surprising.”

The key findings include:

To view select ANZ/Property Council Survey historical data series, visit the Property Council’s Data Room, http://research.propertycouncil.com.au/data-room/economy/property-industry

To find out more about the ANZ/Property Council Survey and our Supporting Sponsor RCP, visit: www.propertycouncil.com.au/confidence

 

 

--ENDS--

 

Source:  Property Council - www.propertycouncil.com.au

Contact:  N/A

External Links:  

http://research.propertycouncil.com.au/data-room/economy/property-industry

www.propertycouncil.com.au/confidence

Recent news by:  Property Council

 

ONLINE PROFILEpan lang="en-us">