NSW property industry most optimistic in Australia: PCA/ANZ

Confidence in the property industry continues to rise in New South Wales, according to the latest results from a survey of 2,300 property and construction sector professionals.

The state’s confidence was indexed at 143 for the September quarter in the Australian Property Confidence Index, with 100 considered neutral. Around 650 New South Wales property professionals were surveyed for the Property Council/ANZ Property Industry Confidence Survey.

Property Council NSW Executive Director Glenn Byres said the property industry is a driver of the “health and vitality” of New South Wales’ economy, pointing to gains from increased stamp duty receipts shown in the recent state budget.

“The industry has retained a rosy outlook and firmly re-established NSW as the most positive state in the nation,” said Byres.

“Forecasts for increased staffing levels, forward work schedules and state economic growth are all firmly planted on the right side of the ledger.

“There are some signs that the rapid increase in residential capital values may be easing – but like all other asset classes, it remains in the positive.”

David Cannington, ANZ’s Senior Property Analyst, says the state’s economy is expected to excel, underpinned by property and infrastructure projects.

“NSW confidence has increased sharply in the past 18 months to be at the highest level across all states and territories in the September quarter, reflecting the strong cyclical upswing in Sydney’s residential property market and solid foreign capital inflows to the NSW property sector,” said Cannington.

“We expect the NSW economy to continue to outperform over the next 12-18 months, largely driven by a solid pipeline of residential and commercial construction and increased state government capital expenditure on a number of large-scale infrastructure projects.

“Despite easing in recent months, housing sales and house price gains in particular remain strong, driving the September quarter outlook for the NSW property sector higher. Moreover, commercial property capital growth expectations remain positive in all sectors, driving expectations for cap rate compression across both prime and secondary grade office property in the coming year.”

Nationally, the Australian Property Confidence Index recorded a one point drop to 131 over the September quarter.