Confidence in the property industry is growing, driven by stimulus measures such as the HomeBuilder grant as well as support from state and territory governments for new and first home buyers, according to new figures from the Property Council of Australia.
In a survey jointly conducted with ANZ, the Property Council revealed that the national confidence score for the December 2020 quarter increased by 6 index points to 82.
Ken Morrison, chief executive of the Property Council, said that the figures showed that 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,” said Morrison. “HomeBuilder 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.”
While the modest growth in confidence is certainly welcome, the Property Council pointed out that the score is still well below a neutral score of 100 and the survey historical average of 123. According to Morrison, this showed that there is 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,” said Morrison. “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.”
Broken down, the majority of markets surveyed reported an improvement in sentiment, with Western Australia recording a 25 index point jump to return to positive territory to lead the country at 107, followed by South Australia (98), New South Wales (84), the ACT (81), Queensland (79), and Victoria (64).
“While sentiment in the housing sector remains negative, it is clearly improving,” said Felicity Emmett, senior economist at ANZ. “The residential construction outlook is a highlight, helped by the federal government’s HomeBuilder program. The scheme, along with other state government initiatives, is clearly giving the housing construction sector a boost – although with population growth dropping sharply and the rental market under pressure, headwinds remain for the housing sector.”
Looking ahead, Emmet said that the recent federal budget should build confidence both in the property sector and more broadly, although the outlook remains extremely challenging and further stimulus may be required over coming months.
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