Industry Confidence in Property Sector Slumps

The Victorian property industry’s level of confidence has slumped to its lowest point since the state’s second major lockdown as high taxes, big spending state budgets and interest rate concerns take a toll nationally.

The sentiment in Victoria fell 14 points to 90 during the June quarter, according to the Procore-Property Council Survey. A score of 100 is considered neutral.

The survey of 532 Property Council of Australia members revealed confidence was down in all states bar one.

It had declined quarter-on-quarter in NSW by 18 points (105), Queensland by 14 points (106), ACT by 2 (114) and South Australia by 18 (121).

Western Australia was the only state where confidence increased, up 2 points to 138. 

PCA chief executive Mike Zorbas said that while confidence across “the nation’s greatest source of jobs” experienced the steepest decline in the two largest states, the picture in Victoria was particularly bleak given economic growth expectations.

The state’s result was 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,” Zorbas said.

▲ WA was the only state where sentiment was positive, according to the PCA.

“Economic growth expectations at both a state and federal level are in negative territory at -16 and -24, respectively, where zero is considered neutral.

“The industry is ‘glass-half empty’ on economic growth at state and national levels, based on high-taxing state budgets on the east coast and uncertainty on interest rates.

“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.”

He said the sector’s expectations around housing price growth had risen to levels not seen since September, 2021.