Property industry confidence drops on lacklustre budgets, housing affordability to worsen
High taxing, high spending state budgets on the east coast and interest rate concerns have impacted property industry confidence nationwide, with Victoria plunging into negative territory for the first time since the COVID-19 pandemic, according to the latest Procore/Property Council Survey.
The survey of 532 Property Council of Australia members found industry confidence dropped over the quarter, with the Confidence Index falling 14 points to 106 points on a national level. A score of 100 is considered neutral.
Property Council of Australia Chief Executive Mike Zorbas said the sharp drop in confidence across property, Australia's largest source of jobs, is a cause for concern.
"Industry is glass half empty on economic growth at both state and national levels, based on high taxing state budgets on the east coast and uncertainty on interest rates," Mr Zorbas said.
"Economic growth expectations at both a state and federal level are in negative territory at -16 and -24, respectively, where zero is considered neutral. Confidence in our two largest states fell steeply with NSW down 18 points and Victoria down 14 points.
"This is a wake up call – in the middle of a housing crisis, expectations for residential construction activity over the next 12 months are back below the historical average.
"We need state Treasurers to craft budgets that close these housing and city planning gaps.
"No wonder the sector's expectations around housing price growth have risen to levels not seen since September 2021," he said.
Mr Zorbas said the picture in Victoria was bleak, with economic growth expectations 37 index points below its average, and 58 index points below Western Australia's result.
"Victoria's property professionals are feeling as good as they were during the state's second major pandemic lockdown, which further emphasises the need for the industry's immense tax burden to be addressed," Mr Zorbas said.
Confidence levels in Victoria dropped into negative territory, falling 14 points to sit at 90 on the confidence index.
New South Wales fell 18 points to 105, Queensland dropped 14 points to 106, ACT declined two points to 114 and South Australia decreased 18 points to 121.
Western Australia was the only state to see an increase in confidence levels, rising two points to 138.
