Economic growth concerns weigh on property industry sentiment

17 October 2019

Property industry sentiment across Australia has retreated from its post-federal election bounce to below the historical average according to the latest ANZ / Property Council Survey for the December 2019 quarter.

Sentiment has fallen by 10 index points from the previous quarter to 118 which is below the historical average of 126 since the survey’s inception in 2011. A score of 100 is considered neutral.

“Growing concerns about national economic growth are weighing on sentiment in the property industry, with a sharp drop in sentiment over the last quarter,” said Ken Morrison, Chief Executive of the Property Council of Australia.

“With the property industry accounting for 13 per cent of GDP and housing construction falling sharply, this is a significant shift.

“The survey underscores the importance of some clear signals from policy-makers on measures which will stimulate investment and spending and underpin confidence for the future.

“When federal, state and territory treasurers meet next week, they should put reforms which will stimulate investment in the property sector at the top of their list, both to boost economic activity as well as ensure there is a strong and stable supply of housing over coming months and years.

“While this survey shows a turnaround in expectations for house prices, sharply falling housing construction will mean that the market will be undersupplying demand again in 2020.

“There are productivity levers that can be used especially at the state and territory level which can smooth out the cyclical nature of the residential property market and ensure that our growing population’s needs for housing are adequately met along with other infrastructure and services.

“The South Australian Government’s risky changes to land tax for property owners and investors has led to precipitous drops in sentiment across the board in just one quarter – a massive own goal for a state which had been leading the way on sentiment and confidence in recent surveys.

“There’s a clear message for all Australian governments – confidence is hard-won, and easily lost through poorly conceived, ad hoc or prejudicial policy changes,” Mr Morrison said.

ANZ Senior Economist, Felicity Emmett commented on the December quarter results:

“Signs of recovery in the residential property market have been emerging for some months now, with sentiment turning around convincingly in May. Since then auction clearance rates have picked up sharply, prices have been rising strongly now in Sydney and Melbourne for two months, and housing finance is starting to pick up. Interest rate cuts (both actual and anticipated), and regulatory easing have been key drivers of this turnaround.

The results of the latest survey show the strong improvement in sentiment has extended into the current quarter. The continued improvement in credit availability suggests that construction activity, and not just prices, should begin to pick up in coming months. Prices are clearly benefitting from the combination of some pent-up demand and low levels of stock, but we continue to think that the current period of strong monthly prices gains will be relatively short-lived, and that prices will moderate in coming months as more supply comes on stream and credit policies remain relatively constrained.

The decline in sentiment in the commercial property sector, while not sharp, continues the downward trend evident since mid-2018. Marked weakness in retail is clearly weighing on the overall commercial sector, while concerns over land tax reform appear to have dampened sentiment in South Australia. But even outside of these segments, sentiment looks to be trending lower with the recent soft tone to the economy and ongoing uncertainty around the global outlook, likely weighing on the business investment environment.”

Highlights from the December 2019 quarter

A score of 100 index points is considered neutral.


The ANZ/Property Council Survey commenced in 2011. It is now one of Australia’s largest surveys of sentiment in the property industry – our largest industry and employer which supports 1.4 million jobs.Respondents are drawn from across the property industry, including property developers, managers and agents and service providers.The survey was conducted between 3-18 September and included 1,068 respondents.

To view select ANZ/Property Council Survey historical data series, visit the Property Council’s Data Room,

To find out more about the ANZ/Property Council Survey and our Supporting Sponsor RCP, visit:




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