There is a need for policies and measures to boost the property industry amid the COVID-19 outbreak to keep the economy in check, experts said.
The latest survey by ANZ and the Property Council revealed a significant slump in the national industry confidence level, which declined to 62 index points, the lowest level since 2011. This represented a 61-point fall from the previous quarterly survey. A reading of 100 on the scale is considered neutral.
A third of the respondents in the survey said the coronavirus outbreak has already had a "serious" impact on their businesses. Nine in 10 of all property industry players said these downside risks could worsen in the next three months.
"These are troubling findings given the importance of the property industry to the Australian economy," said Ken Morrison, chief executive of the Property Council.
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The property industry is a significant driver of employment and activity, and the government needs to provide the necessary policies and measures to support it, according to Morrison.
"No sector of the economy is being spared from the impact of COVID-19, but property is the nation's biggest employer and contributes more than 13% of GDP. This means the property industry needs to be front and centre for policy-makers as they manage and plan the economic and policy response to the pandemic," Morrison said.
According to Morrison, some areas the government should focus on include keeping construction sites open, rolling out stimulus packages to support businesses, and monitoring of rental income and development activity.
Felicity Emmett, senior economist at ANZ, said the slump in confidence was apparent across all property segments.
"After recovering through much of 2019, property sentiment has taken a sharp hit from the coronavirus and the shutdown measures put in place by federal and state governments to contain it. Not surprisingly, the tourism sector has been the hardest hit," she said.
Emmett warned that the impacts of the COVID-19 outbreak might have lasting impacts on the property market.
"With long lags associated with construction approvals, commencements and completions, a quick rebound once the lockdown is eased seems unlikely," she said.
Cressida Wall, executive director for Victoria at the Property Council, said ensuring that planning and construction remain open and viable will be critical to restoring confidence in the industry.
"Maintaining business as usual in construction and planning will be vital to keeping people in work, and we applaud the government and industry's efforts to this end," she said.
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