down, down, down, prices are down everywhere

Property industry confidence down: survey

AAP
July 26, 2012


Property and construction professionals do not have an optimistic outlook for the property sector, even in the mining states of WA and Queensland. Source: The Daily Telegraph

CONFIDENCE is down in the property and construction sector, even in the prosperous mining states, according to a private study.

An industry survey shows property sector professionals are pessimistic in their expectations for the September quarter.

The Property Council of Australia-ANZ Property Industry Confidence Survey released today said its index had fallen to 106 in the current September quarter, from 113 in the June quarter.

The survey focuses on views from more than 3100 professionals across property and construction.

Confidence was weak across all states so far in the September quarter, the survey said - with ACT and Tasmania the lowest, and significant weakness in the larger states of NSW and Victoria.

However, the mining states of WA, Queensland and NT also recorded falls for the September quarter compared to June.

Property Council chief executive Peter Verwer said that sentiment had fallen suddenly after three consecutive quarters of improvement.

"It is the first time in the series that sentiment has turned downwards," he said.

"Expectations for staffing levels and forward work are the cause for most concern - staffing level expectations have been in decline for four quarters but now appear to be accelerating downward."

Mr Verwer said it would take another rate cut from the Reserve Bank to boost optimism.

"Overall, property industry confidence had been coming off the floor, but it appears obvious it will not improve further until the next interest rate cut occurs," he said.

However, ANZ chief economist Warren Hogan said there could be some recovery imminent in the commercial property sector.

"Low vacancy and elevated incentives present considerable upside to effective rents and room rates, particularly in the office, industrial and hotel sectors," he said.

"A robust economic backdrop will underpin tenant demand, while supply will be constrained by rising development costs and tight credit conditions."