Confidence dips in property sector but remains second highest in the country

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ACT Executive Director of the Property Council, Adina Cirson said that despite confidence dropping over the last 12 months, new industry sentiment results demonstrate increasing optimism towards construction and staffing levels – topping the nation in both indicators.

According to the latest ANZ/Property Council Survey – the leading business sentiment index – the ACT recorded a slight downward shift in sentiment, down two index points in the 12 months to December 2018 to 134 points. Despite the fall, the Territory remains in a solid position overall, sitting behind only South Australia, and well up from just 85 points measured in 2012.

“The ACT remains in a strong position as we round out the year – and bodes well for an even busier 2019 here in the nation’s capital,” Ms Cirson said.

We have seen a dip in house, retirement living, hotel and retail capital growth expectations (delving further into the negative), but are being countered by positive increases in the office and industrial markets, and a slight improvement in debt finance expectations.

Territory economic growth expectations have also dipped but remain in the positive, while respondents are relatively neutral when it comes to ACT Government performance. It is also concerning that the sector is lacking confidence in the Federal Government being able to do a good job delivering policies that encourage jobs and economic growth – with results taking a deep dive into the negative, falling 23 index points to -12.8.

“These quarterly results are showing that the ACT remains in a good position from the beginning to the end of the calendar year, with indicators such as forward work schedule expectations once again forging ahead after a slight dip last quarter. We are also seeing a significant increase in confidence for hiring more staff to meet the forward work schedule demands, indicating a positive financial outlook,” Ms Cirson said.

The Survey also revealed a levelling but mostly positive outlook for housing, office, retirement living, industrial, whilst retail (now negative) and hotel/tourism capital value expectations have dropped.

Retirement living growth expectations have again dipped, telling the story of rising demand for retirement living product to match the increased growth of the ACT’s population – and an urgent need to start delivering greater housing choice for our ageing demographic.

“We remain concerned that demand is outstripping supply in the retirement living sector, with the latest ACT population projections, it is estimated that the number of seniors (65+) will increase from 53,000 in 2018 to 95,000 by 2041. If this trend continues, the number of seniors will reach 120,000 by 2050, i.e. more than double in the next 30 years,” Ms Cirson said.

“And with the ACT one of the fastest growing regions in Australia – we continue to push the government streamlined planning approvals, and ensuring that we have the right tax framework and incentives in place to encourage development where and when it is needed to meet the needs of our current and future residents.

“Our housing typology needs to reflect and meet the future needs of our city and a fuller understanding of the density that needs to be created – and this is critical to long term planning for our future residents,” Ms Cirson concluded.

Source: Property Council of Australia