WA retail property sentiment positive as national industry sentiment at 18 month high: PCA

Alistair WalshApril 16, 20130 min read

Western Australia's retail property sector is experiencing some positive sentiment with expectations for price growth in positive territory for the second consecutive quarter, according to research by Property Council of Australia and ANZ.

Sentiment across all sectors within Australia’s property industry is at an 18 month high, according to a Property Council of Australia-ANZ Property Industry Confidence Survey.

The research found gains are driven by increased confidence in the housing market and easing financing conditions.

Across the country overall sentiment is up from 107 last quarter to 124 on the index. A score of 100 is considered neutral.

NSW, VIC, WA and QLD recorded the largest increases in sentiment.

Western Australia leads at 149, followed by Northern Territory at 132, New South Wales at 131, Queensland at 121, Victoria at 117, South Australia at 108, ACT at 96 and Tasmania at 96.

The report made reference to commercial property in the following states:

Queensland

Queensland jumped 17 points in the index.

“Respondents...expressed a positive outlook for hotels, tourism and leisure product in Queensland for the first time since the survey’s inception,” Queensland executive director of the Property Council of Australia, Kathy Mac Dermott says.

“Similarly, expectations for the retail sector continued their recent positive trend, also rising above 100 for the first time – one of only three states in the country to positively rate the sector this quarter.”

ANZ head of property research, Paul Braddick, says, “while property industry confidence remains weighed down by a soft outlook for the coal mining sector and recent job cuts to the state government public service, solid growth in retail sales and house prices in Queensland appear to be partly driving a more optimistic outlook for Queensland’s economy and property sector.”

NSW

New South Wales rose 19 points on the index.

“NSW enjoyed the biggest lift in sentiment of all jurisdictions across the country,” Property Council NSW executive director, Glenn Byres says.

Paul Braddick, says “tight residential property market demand/supply fundamentals, low mortgage rates and solid housing market sales in recent months have driven property industry expectations for house price growth and housing construction higher.”

“However expectations remained varied across sectors with the strongest expectations for capital growth in aged care and commercial office property, while a subdued outlook for retail spending is expected to drive retail property values lower in the coming year,” Mr Braddick says.

VIC

Victoria rose 18 points on the index.

Paul Braddick says, “the increase in property industry confidence was likely driven largely by an improved outlook for the residential property market, with solid housing sales and positive house price growth in recent months.”

“In addition, a more stable global economic outlook and expectations of increased availability of debt finance are likely to have boosted expectations for construction activity and property capital growth in Victoria,” Mr Braddick says.

“Nonetheless, we expect property industry confidence to be weaker in the coming quarters, weighed down by a soft outlook for the Victorian economy, further slowing in Victoria’s housing construction from the recent peak and a subdued outlook for retail spending and office employment.”

WA

Western Australia rose 18 points on the index.

Property Council WA executive director, Joe Lenzo, says the survey results are strong and that sentiment has benefitted from the re-election of the Barnett Government in WA, which guarantees the development of a number of key property projects in the State.

In construction survey results show respondents expect residential, retail, hotels and retirement construction activity to increase over the next year. Western Australia posted strong expectations for construction activity, including the strongest reading for planning office construction activity.

Commercial office price expectations have improved modestly from the previous quarter. The Perth office market has seen strong investment in-flows from international and eastern-states based investors over the last 12-months.

The retail property sector is experiencing some positive sentiment with expectations for price growth in positive territory for the second consecutive quarter.

Alistair Walsh

Deutsche Welle online reporter
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