The latest Procore and Property Council Industry Sentiment Survey shows confidence falling to 92 index points over the June quarter, a five-year low, with all markets anticipating weak economic growth and declining construction activity.
The quarterly survey was conducted following the Federal Budget that announced changes to capital gains tax and negative gearing settings, a 20-year retrospective look back on foreign land CGT and higher taxes on discretionary trust structures that are used extensively across thousands of small businesses in the property sector.
Property Council Chief Executive Mike Zorbas said the results reflect a significant shift in investment confidence at a critical time.
"This is not good news. Industry is reporting a clear loss of momentum when we need new commercial, industrial, retail and housing projects for our growing cities more than ever."
All sectors recorded a decline in expectations for construction activity, while sentiment towards debt finance availability and economic growth also deteriorated across the country. Respondents are increasingly focused on policy settings that affect feasibility, capital flows and project delivery and the consequent negative impact on housing supply and affordability.
"The property industry relies on new investment to deliver homes, workplaces and communities. When investment shrinks across the board, project feasibilities fail."
Mr Zorbas said the results highlight the combined impact of rising material, labour and capital costs alongside policy change.
"The property sector employs 1.4 million Australians and pays $130 billion in taxes each year. Add higher building and borrowing costs, a tradie deficit and new Federal taxes on project investors and you can bet building new homes will soon become even more expensive."
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