Little sign of optimism in the residential sector as confidence falls to lowest levels: ANZ/Property Council
The 2019 March quarter ANZ-Property Council survey shows that confidence in Australia’s housing sector has fallen further than in 2018 and is now at its lowest level since the survey commenced in 2011.
It is not surprising given that many indicators are around their worst levels in many years.
"Housing prices, credit, auction results, days on market and vendor discounts are all weak," the report noted adding there is little sign of improvement.
"The ANZ-Property Council survey is consistent with these other indicators and suggests we are set for an extended period of weakness in the housing sector," it noted.
NSW's property industry confidence has dropped to one of the lowest in the nation, according to the latest ANZ/Property Council Survey.
The largest decline in confidence came in Queensland.
Property Council NSW Executive Director Jane Fitzgerald said sentiment is down.
"With a state and federal election just around the corner, I don’t think we will see it rebound in the short term despite stronger results in some sectors," she said.
“The industry is facing a lot of uncertainty and change, particularly over the past twelve months.
"We have seen the introduction of Special Infrastructure Contributions, increasing 7.11 levies, the changing of key policies such as the Medium Density Housing Code, the updating of Local Environmental Plans, and the review of approaches to planning in areas such as Ryde – that’s a lot of change for an industry."
“With a flat residential market, there is a real risk that this moving feast of policy changes will have a detrimental effect on economic growth and jobs. The 400,000 people who work in the property industry in NSW rely on a healthy industry for their economic wellbeing," she concluded.
David Plank, the ANZ Head of Australian Economics, said the survey gives a softer reading on the health of Australia’s property sector.
"Survey respondents report that the availability of finance will worsen further over the coming year, which is a central feature of our housing outlook.
"In turn, respondents also expect housing prices and construction activity will continue to ease.
"We think prices will fall through to 2020, and expect to see declines around 15–20% peak to trough for Sydney and Melbourne.
"We also think the decline in housing construction will accelerate through 2019 and 2020, as the current backlog of work is gradually completed.
"The survey also suggests that firms expect the next interest rate movement to be higher, though the conviction in this expectation has dropped from the last survey.
"With risks around global trade tension and questions over the sustainability of domestic household spending, we think any RBA move is still some time off.
"Overall, though, the forward work schedule is solid and employment intentions are holding up.
"But clearly sentiment in the property sector is being challenged by a number of significant headwinds.," Plank said.