Confidence takes a dive in the Capital post federal election

Property industry confidence in the ACT has fallen for the September 2019 quarter according to the latest ANZ/Property Council Survey. The quarterly survey tracks sentiment from across the property industry, including the residential and commercial sectors.

Although the overall confidence rating fell by 13 index points to 123, it remains in overall positive territory. (A score of 100 is considered neutral).

The ACT went against the national trend following the federal election result with overall negative sentiment towards the federal government performance.

The Property Council’s ACT Executive Director, Adina Cirson, said the survey results highlighted the importance of good policy and planning to sustain investment and jobs in the ACT property sector.

“The survey results, collected post the federal election, perhaps reflects the concern the sector has about foreshadowed cuts to the public service – announced as being in the order of $1.5 billion to pay for its $1.4bn in election promises, a move that could reduce jobs by 3,000.

“The ACT Budget included some welcome measures to speed up the DA approval process through additional staffing resources and changes to the LVC regime which are positive steps in planning for and supporting our growing city. However commercial rates went up by 6 % and we await further response from the government on the recommended changes noted through the recent commercial rates inquiry.

“Canberra and the region also need to see greater commitment on investing our infrastructure priorities by the Commonwealth Government, including support for the next stages of the Light Rail network.

“Canberra’s growth has been just as significant as that experienced in our major capitals, but has been mostly overlooked by the Commonwealth,” Ms Cirson said.

Other key measures included:

  • Forward work schedules in the ACT have fallen by 19 index points to 26 – the lowest level in five years (since September 2014).
  • On the back of record high staffing level expectations last quarter, sentiment has dropped to 26.6 index points from 59 (down 32.4 index points).
  • The ACT continues to expect a decrease in national economic growth, now at -1.6 index points (up from -9.9 in the June (2019) quarter). It is the only jurisdiction to record negative sentiment.
  • Economic growth expectations for the ACT declined from 8.8 to 4.8 index points. It is the lowest level of sentiment across all jurisdictions.
  • Similar to other jurisdictions, respondents from the ACT expected a cut in interest rates declining from 3.4 to -11.2 index points over the quarter (the RBA announced a cut to interest rates during the survey period).
  • For the first time in four years, the ACT expects debt finance to be more accessible increasing from -15.9 to 10.2 index points over the quarter. All jurisdictions recorded similar expectations.
  • Expectations for residential capital growth fell into negative territory to -7.8 index points for house price expectations, down from 2.2 index points in the June (2019) quarter.
  • Office capital growth expectations for the ACT decreased by 13.6 index points to 13.1 over the quarter.
  • Industrial capital growth expectations decreased from 10.1 to 5.1 index points over the quarter. It is the lowest level of sentiment across all jurisdictions.
  • Retail capital growth expectations decreased by 12.3 index points to -8.3 over the September (2019) quarter.
  • Capital growth expectations for retirement living increased from 36 to 40.5 index points over the quarter. Along with SA, the ACT recorded the highest level of sentiment across all jurisdictions.
  • Sentiment towards hotel capital growth decreased by 16.4 index points to 4.9 over the September (2019) quarter.
  • Sentiment towards the performance of the ACT Government decreased from 19.7 index points (record high sentiment in the June 2019 quarter) to 5.6 for the September 2019 quarter.

The ANZ/Property Council Survey commenced in 2011. It is now one of Australia’s largest surveys of sentiment in the property industry – our largest industry and employer which supports 1.4 million jobs. Respondents are drawn from across the property industry, including property developers, managers and agents and service providers.

The Q3 2019 survey was conducted online between 28 May and 14 June 2019 and included 980 respondents.

Source: Property Council of Australia