Property industry confidence dropped to its lowest level since March 2013, marking its fourth consecutive quarterly decline, according to The ANZ Property Council industry confidence index for the June quarter.
The result underscores Treasury’s budget warnings about the risks to the economic outlook from a further deterioration in the housing sector.
Industry confidence fell by eight points to 115 index points. A score of 100 index points is considered neutral, according to the Property Council of Australia. Confidence levels were down in all states except the Australian Capital Territory.
Over the past 12 months, industry sentiment has slid by 28 index points, with the biggest falls in Victoria (-33), NSW (-32) and Queensland (-26). The ACT recorded the smallest decline during the period (-7) followed by South Australia (-11).
“This is a significant further drop in confidence in one of the big engines of the economy, just one week after Treasury flagged the risks of a declining housing sector in the budget papers,” said Ken Morrison, chief executive of the Property Council of Australia.
He said that the downturn in residential markets, together with expectations around national economic growth, construction and capital growth across some property types, is driving this confidence slump.
“The key message for policy-makers is to keep a sharp focus on the property industry and be prepared to step up with a housing contingency plan if that’s what the economy needs. It is certainly a bad time to be risking changes to policy settings such as negative gearing and capital gains tax which may lead to a further drop in confidence across the industry,” Morrison said.
The ANZ Property Council Survey for the June 2019 quarter measured sentiment across the property industry from March 11 to 26.
