Industry professionals more optimistic about Australian property market, with outlook strongest in WA, NT and NSW: ANZ/PCA

Industry professionals more optimistic about Australian property market, with outlook strongest in WA, NT and NSW: ANZ/PCA
Industry professionals more optimistic about Australian property market, with outlook strongest in WA, NT and NSW: ANZ/PCA

A combination of rate cuts and an improved economic outlook has resulted in confidence about property prices rising in 2013 lift among property professionals surveyed by ANZ and the Property Council of Australia (PCA).

Optimists now outweigh pessimists by around 10%, according to the March quarter PCA-ANZ property industry confidence index, which considers views on the property market over the next 12 months with 3,000 property professionals surveyed.

This is up from an almost evenly divided outlook in the December quarter survey, but still indicates a good deal of uncertainty about whether house prices will rise or fall in 2013.

Overall confidence about the property market over the next 12 months rebounded in the March quarter following falls in the previous two quarter, rising 5 points to 107, compared with 102 in the December quarter, with stronger expectations for house price growth and positive expectations for property construction.

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“Property industry expectations for house prices in the coming year increased in the March quarter buoyed by increased housing sales and improved affordability,” say ANZ senior property analyst David Cannington, who compiled the report along with ANZ’s head of property research Paul Braddick.

“Looking ahead, the combined impact of tight underlying demand/supply housing market fundamentals, expectations of further rate cuts and a steady medium to long-term domestic economic outlook have improved property industry residential price growth expectations.

“However, despite improved sentiment and affordability, the prevailing sense of caution in the household and financial sectors will limit the ‘normal’ cyclical rebound in house prices,” he says.

Expectations for house price growth and overall property market confidence are strongest in WA and the Northern Territory, due to their exposure to the mining sector, with NSW and Queensland the only other states where optimists outweigh pessimists on house price growth in 2013.

Optimists outweigh pessimists on house price growth expectations by 72% in the Northern Territory, by 55% in WA and by 36% in NSW and by less than 10% in Queensland – all improvements on the previous quarter.

Property professionals are almost divided on Victorian house price growth, with pessimists just shading optimists.

A majority of property professionals tip house prices to fall in South Australia, Tasmania and the ACT.

Confidence is highest in WA and the Northern Territory, the states with strongest expectations for economic growth this year due to their mining sector exposure.

They both recorded higher readings of 131 points in the March quarter, though well down on peak readings achieved in the June quarter of 2012 – an indication of the impact that the mining boom is expected to peak soon has had on the property outlook in these two states.

There was also a rise in property market confidence in NSW (112) and an improvement in Victoria, but it remains below the benchmark 100-point setting with a reading of 99.

Confidence remains weak in Tasmania (83) and the ACT (90) and South Australia (92) – with all three states recording a drop in confidence over the quarter.

WA (131) and the NT (131) - showed the strongest property industry confidence across states and territories, followed by NSW (112). Victoria (99), Tasmania (83) and the ACT (90) were the only states/territories to report ‘negative’ confidence.

“Property industry confidence across states and territories largely reflects differing expectations for state economic growth,” says Cannington.

“The highest proportion of respondents expecting state economic growth to be higher in the coming year were also in the NT (54%) followed by WA (39%).

“In contrast, the net balance of respondents expect state economic growth to be lower in the coming year across all other states and territories, with state economic expectations deteriorating in the March quarter in both Tasmania (68% expect state economic growth in the coming year to be lower in the March quarter survey compared to 60% in the December quarter) and the ACT (53% in the March quarter survey compared to 45% in the December quarter),” he says.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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