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Confidence high in Australia's property sector

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The majority of Australia's property industry is thriving, confident and ready to contribute to the nation's economy, according an authoritative new report.

The Property Council of Australia (Property Council) and ANZ have just released the December edition of their joint quarterly property survey, which measures a variety of indicators across the country. In order to conduct the analysis, the two organisations surveyed more than 2,500 professionals, ranging from property developers, owners and managers to those in consultancy and the government.

With pick-ups expected in both construction activity and employment around the nation, in addition to generally high confidence, the future looks bright for the property industry in Australia.

Overall, confidence remains high

The most salient and encouraging finding from the survey is that on the whole, confidence levels in the industry are high - and generally on the up. According to the survey, overall confidence in the sector jumped by four points to reach 135 (100 represents a neutral score) this quarter, despite mixed levels recorded around the country and declines in some states and territories.

This confidence is reflected in the increasing activity in the sector, both in terms of construction work and hiring.

"Even in states where confidence fell, overall sentiment remains strong and the industry expects to increase work schedules and staffing levels," noted Ken Morrison, chief executive of the Property Council.

"The property industry is a major contributor to economic prosperity, so uplift in property confidence is a terrific sign for the broader economy."

The best performing states

So which areas of the country led the way this quarter? The survey revealed that NSW, Queensland and Victoria displayed the greatest increases in confidence to counter the falls seen in some other areas - and lift the confidence of Australia as a whole.

Compared to the nationwide score of 135, for instance, confidence in NSW reached an impressive 147. Queensland demonstrated a similarly positive performance, rising by seven points to hit 143.

Victoria's was a more modest 135, in line with the national average.

"The NSW property industry has been consistently buoyant and entrenched itself as a powerhouse of the state economy," said the Property Council's NSW Executive Director, Glenn Byres.

"We have now led the nation on confidence for three consecutive quarters and been above the national average for over two years."

Mr Byres also pointed out that NSW was just one of two states that displayed positive expectations for capital value growth in the office market, making it a hotspot for those specialising in the commercial property development sector.

Residential and commercial sectors both healthy

Based on the survey's results, both the national residential and commercial property sectors showed signs of growth, which will be welcome news to all across the industry.

For example, the report reveals that the housing market has "regained some momentum" following a period of easing buyer sentiment in the middle of the year. Rises in housing approvals and price growth have, however, helped to reverse this trend.

"Capital growth is also expected to remain positive across all asset classes with residential and retirement living showing strong confidence gains," Mr Morrison added.

Not to be outdone, the commercial property market has also enjoyed a strong quarter, demonstrating signs of positive capital growth and a healthy pipeline of construction activity. This is all the more impressive given recent obstacles such as "elevated vacancy rates, weak net absorption and high tenant incentives".

Whether you're looking to dip into the residential or commercial sector in the midst of this high confidence, it is certainly an opportune time to be in Australia's property industry. With a range of property software tools covering everything from feasibility and investment appraisal to development and beyond, professionals will have no trouble navigating the market.

Date Published: 22 Oct 2014
Category: General News

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