Property Industry Confidence At A Two-Year High

17 January 2017
Confidence might not be the first sentiment that springs to mind for those looking to buy a home, but property industry professionals have got nothing but confidence going into the first quarter.

The ANZ Property Council 2017 Survey has been released, and it reveals that the industry is feeling good about the coming quarter, with confidence rising by two points to 132 for the March 2017 quarter. A score of 100 is considered neutral.

This survey is the largest of its kind, gauging the overall sentiment of more than 1,500 industry professionals.

Chief Executive of the Property Council of Australia Ken Morrison was pleased about the results, saying this is good news to start 2017.

“This data says that the industry is optimistic about the coming quarter. We see good expectations in terms of economic growth, capital values and forward work schedules,” Mr Morrison said.

ANZ Chief Economist Richard Yetsenga added that while “much of the improved outlook for the property market came from the residential segment”, “sentiment in the commercial property segment is still stronger than in residential property”.

“Net confidence in the commercial offices segment has been steadily rising for two years now, reflecting an improving outlook for price growth and construction activity. The result is in line with ongoing absorption of office space, as white-collar employment continues to rise across the major capital markets,” Mr Yetsenga said.

A state-by-state breakdown

The survey also offered some insights into confidence levels in certain states:

Property Industry Confidence scores:

State Property Confidence Index Score Change Since Dec-16 Change Since Mar-16
NSW 149 +7 +7
ACT 142 0 +11
VIC 139 0 -1
SA 130 +2 +11
QLD 123 +3 -15
WA 98 -6 +2

Source: ANZ/Property Council Survey, March Quarter 2017


“We see in NSW a strong surge in confidence underpinned by expectations for economic growth, housing, forward work expectations, as well as confidence in the government itself,” Mr Morrison said.

The state was also described as having “nation-leading levels of confidence”, by Property Council NSW Executive Director Jane Fitzgerald.

“NSW industry confidence leads the nation at 149 index points, up from 142 last quarter and is at a near six year high,” Fitzgerald said.

“Over the twelve months to March 2017, confidence in NSW is up seven index points indicating a strong lead into the New Year.”


This state was described as having “consistent and strong growth expectation”, with its sentiment remaining at 139 points.

According to Property Council Victorian Executive Director Sally Capp, declining credit access and rising tax are cause for concern.

“Tightening credit conditions are causing angst in an industry already grappling with spikes in land tax, rates, stamp duty, and the fire services property levy,” said Capp.


Property industry confidence in Queensland is well behind all other states except Western Australia, with a score of only 123.

Confidence in Queensland rose by three index points over the last quarter, but Property Council Queensland Executive Director Chris Mountford has called on the State Government to do more to boost confidence.

“The property industry is one of the few areas of the Queensland economy that is currently creating jobs,” Mountford said.

“As the Government heads into a likely election year, there is a clear need for further Government action to increase Queensland’s competitiveness as an investment destination.”


The ACT recorded “the highest shift in sentiment in the nation, and Property Council ACT Executive Director Adina Cirson says that the state’s property sector is “feeling confident and ready for a big year ahead”.

“The March quarterly results reveal a growing optimism across many of the indicators, with the ACT one of two leading jurisdictions with business confidence at 142 points,” Cirson said.

“The ACT results show very positive signs for the city with forward work schedule expectations currently the highest in Australia. This is teamed with a positive outlook for the Territory’s economic and national growth expectations, which continue to rise.”

South Australia

South Australia’s overall confidence in the state’s property sector increased by two points, however Property Council SA Executive Director Daniel Gannon says that “the latest confidence dataset for South Australia reveals some good signs, but also some bad signs”.

“National and state economic growth expectations are falling, which means that Governments need to double-down on growth strategies,” Gannon said.

“To enable growth and job creation, the State Government should implement five key reforms that will act as a catalyst for confidence and economic development. Without significant reforms of this nature, South Australia’s confidence levels will continue to tread water.”

Western Australia

Australia’s largest state isn’t faring well, with Mr Morrison saying, “Western Australia is still coming to terms with the end of the mining boom, and confidence did slip back into negative territory.”

Property Council WA Executive Director Lino Iacomella added that “these results confirm what we know – that it’s a long, hard slog back after the end of the mining construction boom”.

“There is however some room for optimism in the survey, with retail and retirement living sectors bucking the trend with positive growth expectations. This can be explained by the growing focus on delivering diverse housing choices for our ageing population and continued investment in shopping centre redevelopment,” Iacomella said.

What can be done to increase confidence further?

Mr Morrison says that elimination of unnecessary government process is “the easiest and least costly way to facilitate sustainable growth, quickly”.

“Tackling our byzantine planning systems, cutting unnecessary delays costs Federal and State budgets nothing. But they will spur investment, jobs and growth during a time when it is vital that the economy is sustained by private sector growth.”

“Outside of NSW and the ACT, we see industry concerns about the state government performance in terms of planning and managing growth. While there was an improvement in perceptions of the Federal Government’s performance, it is still in negative territory.”

The full survey chartbook can be downloaded here.

Share this article