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Property confidence spikes as credit sentiment rises

Confidence in the property industry has bounced, driven by a sharp improvement in credit sentiment, according to new research from ANZ and the Property Council.

The latest ANZ/Property Council Survey, which assessed property industry expectations for the September quarter of 2019 from 990 stakeholders, has reported a spike in sentiment off the back of the federal election.

Property industry sentiment rose from 113.4 index points for the three months to 30 June, to 122.3 index points for the September quarter, with confidence spiking in every state and territory except the ACT, where it dropped from 137.4 index points to 124.3.

The survey also revealed that expectations regarding credit availability also surged, rising from -29.1 index points to 3.2. Credit sentiment improved in every state and territory, with Western Australia recording the sharpest spike (-29.0 index points to 15.6).  

According to Ken Morrison, CEO of the Property Council, the improvements in sentiment have been triggered by political and economic developments.  

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“Following the federal election, we have had a quadrella of positive policy news, which translated into a strong sentiment bounce: certainty on negative gearing and capital gains tax changes, an interest rate cut, APRA’s lending standards review and the proposed first home buyers loan deposit scheme,” he said.

“These are very welcome steps and have led to a much stronger expectations of national economic growth and the availability of credit.”

ANZ’s head of Australian economics, David Plank, agreed, adding that the boost in credit sentiment is a particularly strong sign of a property market recovery.

“This measure has proved to be a reliable indicator of shifts in housing activity in the past, and if it remains, so it suggests better times ahead,” he said.

However, Mr Morrison has warned that the recent shift in the global economic outlook and proposed policy reforms from state governments could pose a threat to market confidence.

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“[The] property sector is not immune from the challenges facing the rest of the economy, and a number of state governments have just embarked on a range of investment-sapping tax increases,” he said.

“State budgets in Queensland, Victoria and South Australia have hit the property industry with arbitrary and poorly designed tax increases, which will hurt investment and job creation and risk undermining the current sentiment turnaround.”

[Related: Home sales resurge in ‘post-election euphoria’]

Property confidence spikes as credit sentiment rises
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