20 April 2018

ACT among standout performers as Australian confidence in property industry surges

| Glynis Quinlan
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Inner south development

There is growing confidence in the ACT property industry in terms of forward work schedules, staffing expectations and housing.

Confidence in Australia’s property industry has surged to its highest level in six years, with the ACT identified as one of the standout performers in the ANZ/Property Council Survey’s June 2018 quarter results.

Property Council ACT Executive Director, Adina Cirson said the ACT’s strong quarterly industry sentiment results show growing confidence in forward work schedules, staffing expectations and housing, as well as office market growth expectations – with many indicators leading the nation.

The survey shows the ACT increased 7 points to 144 for the June 2018 quarter, which is up from 137 points in the March quarter (with a score of 100 considered neutral). South Australia and Queensland were the other jurisdictions to see strong improvements.

Ms Cirson said the ACT’s results are a big improvement on those of five years ago when confidence sat at just 90 points.

“The ACT results confirm positive expectations for our city – with growth projected in forward work schedules and a huge increase in staffing level expectations – up 15.9 points this quarter, with the ACT now leading the country,” Ms Cirson said.

“This means the sector is feeling more confident about locking into labour costs and is feeling very confident about hiring more staff, which means they also have confidence that their financial position and that the broader economy will continue to improve.”

Drop in ACT retirement sector confidence

Ms Cirson said that economic growth expectations for the ACT and the national economy have remained steady – and in the positive – but there is growing concern about rising interest rates and tightening around access to debt finance that needs careful monitoring.

She said the retirement sector had also come off a particularly high previous quarter in the ACT – a downward trend not being experienced by other jurisdictions.

According to Ms Cirson, the sector is worried about the availability of ACT land supply to meet the growing demand for independent retirement living dwellings, which highlights ongoing concerns about a lack of housing diversity in the market.

“The sector continues to watch closely on policy challenges of cities and infrastructure, housing affordability, economic growth, tax reform, energy efficiency and global capital – with respondents citing these as the top issues to monitor going forward,” Ms Cirson said.

Property Council ACT Executive Director, Adina Cirson. Photo: Supplied.

Challenges for ACT Government

By contrast, Ms Cirson said there is much more optimism in the ACT about the Federal Government being able to deliver policies that encourage jobs and economic growth.

She said that sentiment toward the ACT Government on its planning for and managing growth remains in the negative but has shown improvement this quarter.

“It means that whilst there is confidence in the market – the ability to get on and deliver for Canberra remains heavily reliant on the ACT Government being able to remain agile and respond to the demands in the market,” Ms Cirson.

“This can be done through reduction of red tape, ensuring viability of development through fair and equitable taxes and charges, and making sure delays in planning caused by increasing volumes of approvals are minimised.”

The national confidence index for the June quarter has climbed four points to 143 – the highest on record, with improvement across all states and territories.

ANZ Senior Economist, Daniel Gradwell said the June quarter survey result shows that the optimism in the property sector has continued into 2018.

Below are the ACT survey results for the March to June 2018 quarter.

ANZ/Property Council Survey – March to June 2018 quarterly results for the ACT.

Do you think the retirement sector is right to be concerned about a lack of appropriate and available land in the ACT to meet the sector’s growing needs? Let us know your thoughts in the comments below.

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