WA property outlook positive although residential growth lags

West Australian property industry participants do not share the confidence of their interstate counterparts about a residential housing market recovery, according to the latest ANZ/Property Council Survey for the March 2020 quarter.

The survey, conducted between November 18 and December 6, 2019, revealed a slight overall improvement in WA property industry confidence to 124 points, up from 122 points in the December quarter. This was reflected in positive expectations about forward work schedules, staffing levels and economic growth. Confidence in WA is now on a par with Victoria and NSW and one point ahead of the national index.

However, WA had the lowest expectations for an improvement in house capital growth over the next 12 months at just 6 index points, up by three points on the last quarter.

The WA industry rated the Federal Government’s performance at zero, down from 13.5 points and the State Government at minus 13 points from 5.2 points previously.

Property Council WA Executive Director Sandra Brewer said the local property industry was more upbeat than other states about our State Government’s performance on housing supply and affordability, development around transport nodes, and planning reform. However, it rated the government lower on property taxes and charges.

Concerns about vibrant city centres, which appeared to be elevated during the survey period, were likely to be addressed by all three tiers of government working together on a Perth City Deal to help the city reach its full economic potential, Ms Brewer said.

Property Council WA was pleased the State Government and the City of Perth had in late November and early December each outlined plans to co-ordinate services to the homeless and provide longer-term housing options, in line with the industry’s advocacy.

“Our members support action on housing affordability, the Metronet rollout, planning reform and work on a City Deal,” Ms Brewer said. “However, the March 2020 survey results indicate that our members feel there’s more work to be done on property taxes and charges.

The survey was conducted after the State Government announced its 75 per cent stamp duty rebate on off-the-plan apartment sales, a fantastic initiative to level the stamp duty playing field between unbuilt houses and apartments.

“The State Government’s 75 per cent stamp duty rebate on off-the-plan apartment sales applies to all buyers, seniors, locals, foreigners, and our members will be watching closely for a surge in buying interest. We believe this rebate has the possibility to stimulate activity and generate construction jobs, though some tweaking in the way it is implemented may be needed.”

Premier Mark McGowan announced a two-year trial of the 75 per cent stamp duty rebate on off-the-plan apartment sales on October 23.

According to the ANZ/Property Council Survey results, WA respondents were the most upbeat of all the states when it came to their expectations for national economic growth, at 2.1 points from minus 3.9, the only state or territory to record a positive rating. Overall, national economic growth expectations were minus 6.8 for the March 2020 quarter, an improvement on minus 14.2 in the December 2019 quarter.

Of the states, WA had the lowest expectations of an improvement in the value of office, residential, industrial and hotel values and was most bearish about the availability of debt finance.WA respondents were also pessimistic about retail property values for the next 12 months, at minus 13.9 points, the second lowest of all the states. It was the only state to record negative expectations about hotel values, at minus 1.5 points, where the Australian average was 9.7 points and Queensland recorded 16.6 points.

Industry wide, the most critical issue for the Federal Government was cities and infrastructure delivery, with energy, environment and emissions second, and housing supply and affordability in third place. WA respondents were most concerned about the State Government’s performance on property taxes and charges (30 per cent, compared with 21 per cent Australia wide).

The ANZ/Property Council Survey started in 2011. It is now one of Australia’s largest surveys of sentiment in the property industry – our largest industry and employer which supports 1.4 million jobs. Respondents are drawn from across the property industry, including property developers, managers and agents and service providers. The Q1 2020 survey was conducted online between 18 November and 6 December and included 953 respondents.

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