PROPERTY industry confidence has surged to record levels, up eight points to a new high of 140, according to the Property Council/ANZ Property Industry Confidence Index.

Property Council chief executive Peter Verwer said positive expectations about house price growth and significant expected increases in residential construction activity across the nation are driving a strong upturn in confidence for the property industry.

“The industry has been buoyed by strong staffing level increases across the nation over the last three months and is confident of further increases in staff hiring over the next 12 months.

“As Australia’s politicians look for a solution to boost economic growth and create jobs, the clear answer is the property industry.

“The message from Australia’s largest business confidence survey is that it is property and construction, the industry that employs more people and contributes more to GDP than any other, that will lead the way to future prosperity,” he added.

Almost all asset classes across the nation are expected to enjoy capital growth over the coming quarter with residential the big winner. Capital values are also expected to increase.

ANZ chief economist Warren Hogan said a buoyant property sector is leading the broader economy out of the gloom that has prevailed in recent years bolstered by low interest rates and solid investor demand for both residential and commercial property.

“Outside the property sector, the improvement in business sentiment has been tentative and the near-term outlook for the Australian economy remains subdued. Mining investment is winding down from unsustainable highs and the public sector will likely detract from growth in the near-term.

“Hence, despite a solid recovery in the property sector, ANZ expects that Australia will experience below-trend growth over the next 12-18 months.

“For monetary policy, this suggests that we are in for an extended period of low interest rates. The future path of the AUD, however, will remain an important consideration for the RBA,” he concluded.

Property Review