- Confidence among Australian property professionals jumped to the highest level on record in the June quarter.
- Confidence improved across all Australian states and territories.
- Most respondents expect Australian house prices will increase over the next 12 months.
Australia’s housing market may be slowing down but that’s clearly not impacting sentiment among those who work in the sector.
According to the latest ANZ-Australia Property Council Survey, confidence among property professionals jumped to the highest level on record in the June quarter of this year.
“The survey shows that optimism in the property sector has remained elevated as 2018 progresses,” said ANZ following the release of the latest survey.
“Nationwide confidence rose to the highest level on record, with improvement across all states and territories.”
As the title of the chart below states, property professionals, no matter where they’re located, think “it’s all good” based off their responses in the latest survey.
“The survey for the June quarter gives very positive feedback on Australia’s property sector,” said Daniel Gradwell and David Plank, members of ANZ’s Australian economics team.
“The convergence in optimism across the states remains a highlight. It is the first time since the survey commenced that the states’ optimism has been so well aligned, let alone at such a high level.”
While, from a broader perspective, property professionals have never been more bullish, Gradwell and Plank said there were larger divergences in confidence seen across individual sectors.
“While the regions are generally all positive, it’s a different story across the sectors,” they said.
“The improvement in residential property confidence, while mild, supports our view that the worst is most likely behind us in terms of slower housing price growth. A huge backlog of work will also continue to support construction and employment.
“On the other hand, sentiment in the retail sector is falling fast, reflecting the headwinds of a very competitive marketplace, disruption from online sales, and a soft household spending environment.”
While confidence levels among those working in the retail property space remained subdued, the same could not be said for those working in other sectors, including, somewhat surprisingly, residential property.
“The survey results support our recent assertion that Australia’s housing sector is ‘gliding to a soft landing’,” said Gradwell and Plank.
“The outlook for construction activity has improved over the past six months, with New South Wales and Victoria supporting the pick-up in the June survey.
“Building approvals have been resilient around elevated levels, and recent building activity data show that there is still a record $40 billion of housing construction yet to be finished.
“As such, we expect to see dwelling investment remain elevated over the near term, before easing slowly toward the end of 2018 and into 2019.”
Despite recent price declines in Sydney and Melbourne prices, a majority of respondents indicated that they expect residential prices will rise over the next 12 months.
“Most survey respondents still expect residential property values to increase over the next year,” said Gradwell and Plank.
“Western Australia is the most optimistic region, with a net 53% of respondents expecting to see prices rise from here. In New South Wales, a net 11% of respondents expect prices to decline in the next 12 months.”
Gradwell and Plank said the result supports their view that the worst of the price falls are now behind us, including in Sydney.
They see national prices nudging higher, albeit only marginally, toward the end of this year.
This table from ANZ shows the net balance of respondents who expect property values to increase in the year ahead.
And this chart shows the net balance who expect construction activity to improve over the next 12 months.
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