ACT property sector confidence falls

The latest ANZ/Property Council Survey has shown ACT property industry confidence has fallen for the December 2020 quarter as the sector braces itself for more challenging times as the impact of the COVID-19 induced recession sets in.

Overall property industry confidence has dropped by 13 index points from 94 to 81 significantly below its high of 144 points at the same time last year. A score of 100 is considered neutral. The national confidence index was 82, up six index points from the previous quarter.

“Our members across the Territory are telling us their greatest concern is the impacts of the crisis are yet to be felt,” said Adina Cirson, the Property Council’s ACT Executive Director.

58 percent of survey respondents in the ACT said they expect conditions won’t improve or will get worse in the next three months. Only 42 per cent of respondents expected things to improve, compared to the national average of 51 per cent.

“Unfortunately that uncertainty will continue as long as restrictions across the city remain in place, despite months of no new cases.

“Forward work schedule expectations for the next 12 months have dipped into the negative after the previous quarter showed positive signs. Similarly, concern about the construction pipeline is impacting the ability to increase staffing levels, which has also slipped into the negative. Access to debt and interest rate expectations remain in the negative, as does Territory economic growth, although slightly improving from last quarter.

“The last time many of these indicators slipped into the negative was at the beginning of the pandemic and the lockdown. It is concerning the outlook continues to be negative many months later despite no community transmission in the ACT, Some sectors have been hit harder than others, with hotels and tourism being hit the hardest, followed by retail and commercial office markets, all slipping further into the negatives.

“The only shining light is that housing growth expectations are finally back in positive territory after two consecutive quarters of sitting in negative territory. Expectations were buoyed by the positive impact that the sector is seeing through roll out of the HomeBuilder grant, with nearly 80% of developers operating in the residential sector believing that it is positively impacting their businesses,” Ms Cirson said.

Economic management, cities and infrastructure delivery and tax reform are identified, across the country, as the most critical issues for governments to address, and we are urging the next ACT Government to put these issues as their top priorities post the 17 October poll.

“When asked about whether the Federal and Territory Government was doing a good job of encouraging jobs, planning for and managing economic growth, respondents indicated both levels of government fell short of last quarter expectations.

“Our industry is going to be vital in the post COVID-19 recovery phase, and ensuring we have a solid pipeline of construction projects is essential. It’s going to be a very challenging term of government for whomever comes out the victor in Saturday’s election,” Ms Cirson concluded.

ANZ/Property Council Survey – December 2020 quarterly results – Australian Capital Territory

Index

Overall Context

Quarterly Result

Quarterly Change

Comment

Confidence Index

NEGATIVE

DOWN

94 to 81

Despite a decrease over the quarter, the result

is more optimistic than June 2020’s result of 64

index points

State Economic Growth

NEGATIVE

UP

-18.8 to -15.8

Slightly more optimistic sentiment recorded over the quarter

State Govt Performance

NEGATIVE

DOWN

6.3 to -19.0

Sentiment dropped from positive to negative territory this quarter

Forward Work Schedules

NEGATIVE

DOWN

11.2 to -7.6

Sentiment dropped from positive to negative territory this quarter

Staffing Levels

NEGATIVE

DOWN

3.5 to -2.6

Dropped from highest sentiment in the nation into negative territory

House Capital Growth

POSITIVE

UP

-21.2 to 7.0

Increase in sentiment into positive territory

Office Capital Growth

NEGATIVE

DOWN

-36.7 to -45.5

Lowest sentiment on record

Retail Capital Growth

NEGATIVE

DOWN

-51.0 to -54.7

Sentiment drops further into negative territory

Industrial Capital Growth

NEUTRAL

UP

-9.4 to 0.0

Neutral growth expectations

Hotel Capital Growth

NEGATIVE

DOWN

-50.7 to -66.3

Sentiment drops further into negative territory

Retirement Living

NEGATIVE

DOWN

0.9 to -3.3

Dropped from highest sentiment in the nation into negative territory

To view select ANZ/Property Council Survey historical data series in the Property Council’s Data Room, click here.

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