Property growth expectations hit record highs
Confidence in the property industry is just shy of setting a new record, buoyed by the speed of economic turnaround and heightened demand in the residential and industrial sectors.
National industry confidence soared to 142 points at the end of March, up 80 points since March 2020, to reach the second highest level since the ANZ/Property Council industry survey began.
Setting new records are the industry’s capital growth expectations for the housing and industrial sectors over the next 12 months, with confidence in a further boost in house prices striking a record high of 74 index points.
Confidence in the industrial sector also pushed growth expectations by 14 index points to a new record.
ANZ senior economist Felicity Emmett sees Australia’s “stellar” economic performance as a key driver of near-record property sentiment, coupled with a large pipeline of work and a strong outlook for property prices.
“The combination of record-low mortgage interest rates and targeted stimulus is clearly supporting the housing sector, where confidence is now at record levels,” Ms Emmett said.
She explained that the large chunk of demand brought forward by the HomeBuilder scheme, along with state and federal government initiatives, has more than offset the impacts of low population growth and elevated unemployment.
This, Property Council of Australia chief executive Ken Morrison opined, is “exceptional news” for the entire economy.
“When the property industry is confident, it is exceptional news for the entire national economy because it employs so many people, more than 1.4 million Australians,” Mr Morrison said.
“While the economy still faces significant challenges, the property industry is clearly buoyed by the speed of our turnaround and the strong demand they are seeing, particularly in the residential and industrial sectors,” he noted.
And while the office sector still raises some concerns, office capital growth expectations did increase over the March 2021 quarter, but remain in negative territory at -13 index points.
Applauding the government’s business support measures, Mr Morrison explained more needs to be done to encourage workers back into the CBDs.
“With many stimulus measures having now run their course, it is critical that this confidence is backed up by policymakers through measures that will continue to help reactivate our CBDs and upscale our quarantining capacity,” said Mr Morrison.
The ANZ/Property Council industry survey, which garnered 830 respondents between 15 and 31 March, also revealed that respondents from all states and territories expect an interest rate increase over the next 12 months.
And while national economic growth expectations increased to 38 index points, the highest level on record, confidence in the federal government’s role in delivering policies that encourage jobs and economic growth has decreased over the quarter from 49 to 39 index points.
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