West Australian property industry participants have seen the prospect of a long-awaited recovery smashed by the coronavirus epidemic, reporting their lowest levels of confidence since the survey started, according to the latest ANZ/Property Council Survey for the June 2020 quarter.
The survey, conducted between 16-31 March 2020, revealed the slight gains of the previous quarter, in which WA property industry confidence edged up 2 points to 124 points, were eliminated as confidence levels almost halved to 63 points for the June 2020 quarter.
The WA result was mirrored in every state and territory surveyed, with the overall result for Australia, 62 points for the June 2020 quarter down from 123 points in the previous quarter. A score of 100 is considered neutral.
The result reflects concern about the impact of the epidemic on forward works, staffing levels and economic growth, with property participants across Australia uniformly reporting an immediate negative impact on their business from the COVID-19 pandemic that they anticipated would worsen over the next quarter.
However, when asked about current construction schedules, 84.7 per cent said the virus would have no or only a moderate impact, reflecting a concerted commitment around the country to ensure construction sites continue to operate safely with appropriate distancing and site hygiene.
Construction activity expectations for the year ahead around the country dived across every property sector, including residential, office, retail, and hotels, with only industrial and retirement construction expectations above zero index points.
WA property industry participants remained the most concerned about the availability of debt finance at minus 15.2 points compared with minus 12 points Australia wide.
Property Council WA Executive Director Sandra Brewer said elevated levels of concern in WA reflected the differing experience of West and East Coast participants.
Across the nation, WA reported the lowest level of confidence about growth in the value of house prices, and office market sectors. Expectations for the retail sector was negative at minus 49.5.
"In the past decade WA has experienced the highest levels of office vacancy, persistently low house price growth and our retail and industrial sectors have been buffeted by the boom-bust nature of our resources cycle. This underscores the importance of treading carefully when it comes to imposing uniform policy across the country. Not all States and Territories are the same," Ms Brewer said.
There was a slight improvement in WA industry views on the Federal Government's performance, recording 2.2 points for the June 2020 quarter, up from zero in March. There was a stronger turnaround for the the State Government at 1 point for June 2020, up from minus 13 points in March 2020.
Ms Brewer said property taxes and charges, planning and regulation and housing supply and affordability were still important issues for the State Government but a fair commercial tenancy code of conduct and eliminating obstacles to important job generating projects were top priorities.
"Right now, we are working with the State Government on a fair commercial tenancy code of conduct. An effective commercial tenancy code of conduct that will get WA business rebounding after hibernation is one that is fair for all parties, including small property owners, and encourages owners, agents, tenants and banks to work together.
"We are also assisting Planning Minister Rita Saffioti in her efforts to remove barriers to job generating projects that are vital for generating economic activity and jobs for West Australians," Ms Brewer said.
