The level of confidence in the NSW property industry is now lower than Victoria’s, new research has revealed.
The latest survey data from ANZ/Property Council’s Property Sentiment Index has reported a significant drop in confidence in the NSW property industry, following a 7 index point reduction over the September to December 2017 quarter, with confidence levels in Victoria now surpassing that of NSW.
Confidence in the NSW property industry fell from 147 to 140, with a 9 index point reduction forecast in the 12 months leading to March 2018, while confidence in Victoria’s property industry rose by 10 index points from 135 to 145 in the same quarter.
Confidence in the availability of debt finance in NSW also reduced, with an already negative outlook dropping further from -7.5 points to -14 points.
The data also revealed that capital value expectations for NSW’s residential sector are the lowest they’ve been since 2012, falling from 9.9 points to -5.1 points, with expected construction activity also at its lowest point since the survey commenced, dropping from 56 points to 49.2 points.
Survey respondents also expect negative growth in the state’s economy, with growth expectations declining from 23.7 points to 16.5 points.
Confidence in the NSW government’s leadership is also down, falling from 14.2 points to 9.9 points.
Property Council NSW executive director Jane Fitzgerald said that she believes NSW’s property industry outlook is, however, still “healthy”.
“The NSW industry is still strong, with a healthy outlook for capital value expectations in both the office and industrial sectors and staff hiring expectations; yet we must look at what can be done to ensure that our industry continues to deliver for NSW,” Ms Fitzgerald said.
She urged the NSW government to execute planning and infrastructure arrangements, and she called for the implementation of policies that would “strengthen the housing pipeline”.
“NSW is currently a fluid-policy environment, with many strategic planning documents, infrastructure financing approaches and local planning strategies to be finalised in 2018. These need to be completed and implemented by the NSW government to ensure strong industry confidence.
“We need to see policies that will strengthen the housing pipeline and enable housing where we most need it. A softening residential sector will have flow-on effects to housing affordability, employment and government revenue.
“These latest results show that our industry’s strong position must not be taken for granted, and transparency and consistency must be provided through strong policy leadership.”
The outlook for staffing levels remains “stable”, falling slightly from 30.2 points to 29.7 points.
The national confidence index rose by 9 index points from 132 to 141 in the same quarter.
[Related: Hobart to be new housing hotspot for 2018]