Dwelling values are continuing to climb but so is confidence, with new data showing industry confidence levels are approaching record levels.
According to the ANZ/Property Council industry survey for the March quarter, national industry confidence soared to 142 points, which is the second-highest level in the survey’s history.
This represents an 80-point improvement over the past 12 months, with the pandemic initially hitting confidence levels hard. A score of 100 is considered neutral.
There were 830 respondents to the online survey between March 15 and 31, with the majority of survey responses collected before southeast Queensland’s recent lockdown.
Property Council of Australia Chief Executive Ken Morrison said record-high economic growth expectations were driving the boost in confidence.
“When the property industry is confident it is exceptional news for the entire national economy because it employs so many people, more than 1.4 million Australians,” Mr Morrison said.
He acknowledged the economy still faced tough challenges, but said the Australian property industry has been buoyed by the speed of the economic turnaround and strong demand in residential and industrial sectors.
Respondents expected Australian house prices to increase over the next 12 months, with the national expectations index reaching a record high of 74 index points.
One area that dropped was confidence in the Federal Government’s role in delivering policies that encourage jobs and economic growth, decreasing from 49 to 39 index points.
Respondents in most markets – with the notable exceptions of Queensland and Victoria – also believed their respective state governments were doing a good job planning and managing growth.
The survey responses also indicated concerns about the office sector have eased as more workers returned to the CBD.
Mr Morrison said government stimulus and assistances measures had helped support the industry and the broader economy over the past 12 months but noted many had now run their course.
“It is critical that this confidence is backed up by policymakers through measures that will continue to help reactivate our CBDs and upscale our quarantining capacity,” he said.
The survey found national economic growth expectations had jumped from 13 to 38 index points, which is the highest level in the survey’s 10-year history.
Capital growth expectations over the next 12 months for the housing and industrial sectors are also at the highest levels recorded across all jurisdictions.
Over the next three months, 64 per cent of respondents believe the impact of the coronavirus outbreak on their business will improve.
ANZ Senior Economist Felicity Emmett said: “Property sentiment has improved again, reflecting stellar economic performance, a large pipeline of work for the coming year and a strong outlook for property prices.”
She said a combination of record low mortgage interest rates and targeted stimulus had played a key role in supporting the housing sector.
“Price expectations are at all-time highs, while the HomeBuilder scheme, along with state and federal government initiatives, has brought forward a large chunk of demand,” Ms Emmett said.
“This has more than offset the impact from low population growth and elevated unemployment.”