‘Pop Star’ Stimulus Boosts Property Industry Confidence

The industrial and residential construction boom is expected to continue for the next 12 months as national property industry confidence lifts.

Industrial construction expectations are continuing on an upward trend and residential remains in positive territory, according to the latest ANZ-Property Council Survey.

Although the national confidence score for December 2020 quarter increased by 6 index points to 82, it is still well below a neutral score of 100 and the survey historical average of 123.

The result is weighed down by the retail construction expectations down -22, followed by hotels at -18 and office down -14 index points.

ANZ senior economist Felicity Emmett said that property sentiment has improved a little, but remains depressed in the wake of Covid-19 .

“The impact remains widespread across states and sectors, with sentiment in the tourism, office and retail sectors still extremely weak.

“In contrast, the industrial property sector has strengthened alongside the acceleration in e-commerce.”

After dipping in the June 2020 survey, residential construction expectations for the next 12 months have remained in positive territory.

Property Council of Australia chief executive Ken Morrison said stimulus measures such as HomeBuilder were providing a much-needed boost for the property industry at a critical time.

“As the scheme has become available in all states and territories we have seen a big lift in sentiment among those in residential development,” Morrison said.

“Home Builder is the pop star of government stimulus measures released so far; highly effective, immediate and good value for money.

“The challenge will be maintaining this momentum beyond December when the current scheme expires and we are looking at a huge drop in population growth due to closed borders.”

Morrison said there was still a long way to go before property industry sentiment returned to its pre-Covid levels.

“Government stimulus measures will be essential to helping our industry drive economic recovery,” Morrison said.

“As household income supports such as JobSeeker and JobKeeper are wound back over the next few months, all levels of government will need to step in with incentives that will deliver fast and effective stimulus to build momentum for recovery.”